Home Daily Commentaries NZD forced lower as tariffs back in the headlines

NZD forced lower as tariffs back in the headlines

Matt Richardson
Written by
Matt Richardson

Matt Richardson

OFXpert

Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange.

| Wednesday 19 March, 2025

Daily Currency Update

The New Zealand dollar edged lower Tuesday, giving up just under 0.1% amid a tempering in risk demand and new tariff headlines. With little of note on the domestic ticket, the NZD was again at the mercy of the broader risk narrative and tracked off highs near US$0.5830, drifting back toward US$0.58 before finding support and settling nearer US$0.5815 at the time of writing. Tariff headlines were again in focus as US trade officials reportedly considered grouping trading partners into tiers to better and more efficiently implement its reciprocal tariff agenda next month. Ultimately Trump pushed back against this proposal preferring an individualized approach. Reports indicate that US officials have considered value-added taxes on consumption a barrier and will retaliate. In this light, we can expect at least a 15% tariff across NZ exports in line with the GST.

Our attention now turns to domestic consumer confidence and current account data while the Bank of Japan policy announcement dominates the offshore docket ahead of tomorrow’s Fed Policy update.

Key Movers

There has been little net movement among majors overnight with geopolitical tensions again in focus. Presidents Trump and Putin announced a 30-day ceasefire across energy and infrastructure targets with plans to expand and include maritime activities in the Black Sea. With Putin imposing several conditions on negotiations before a lasting peace deal can be reached markets were hardly moved as hopes for a short-term deal have faded and market expectations for any significant step toward peace are low. Risk sentiment faltered driving risk assets back into the red while the USD DXY index is little changed. The euro and pound enjoyed modest gains up through 1.095 and 1.30 respectively. Having extended gains against the USD both currencies extended their recent upswing against risk-driven majors forcing both the AUD and NZD lower.

Our attention now turns to the Bank of Japan policy meeting. We expect policy makers will leave rates on hold and maintain a pedestrian pace toward policy normalisation.

Expected Ranges

  • NZD/USD: 0.5750 - 0.5850 ▼
  • NZD/EUR: 0.5280 - 0.5350 ▼
  • GBP/NZD: 2.2200 - 2.2500 ▲
  • NZD/AUD: 0.9080 - 0.9180 ▲
  • NZD/CAD: 0.8250 - 0.8350 ▲

Written by

Matt Richardson

OFXpert

As a Senior Corporate Client Manager, Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange. Matt has clients who he has been working with for over a decade, a testament to his knowledge and dedication in the field. Matt is also a regular contributor on Ausbiz, offering clear and precise updates on currency market trends, showcasing his ability to interpret complex financial data into actionable insights.