Home Daily Commentaries NZD pitches lower as US on track to implement aggressive tariff plan

NZD pitches lower as US on track to implement aggressive tariff plan

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.

| Friday 28 February, 2025

Daily Currency Update

The New Zealand dollar moved sharply lower on Thursday, as tariff headlines again dominate direction. After yesterday suggesting a 25% tariff on Canada and Mexico would be postponed into April, President Trump reversed course announcing all was on track for the tariffs to be implemented on March 4. At the same time Trump announced plans to impose an additional 10% tax on Chinese imports, propelling the USD back toward 7.30 against the CNH. The NZD tumbled back below US$0.57 and US$0.5650 marking intraday lows just above US$0.5630 following the announcement. The move illustrates just how vulnerable the NZD is to global risk sentiment and the implications of an all-out tariff war. The market has still nowhere near priced in the full probability of tariffs and continues to hold out hope they will be either delayed, postponed or forgiven. This leaves the NZD open to further downside risks and a break back toward late January lows south of US$0.55.

Our attentions remain affixed to US trade policy while Tokyo CPI data, EU inflation numbers and the Fed PCE inflation index offer macroeconomic guidance through Friday.

Key Movers

US tariff news dominated headlines and sent shockwaves across FX markets on Thursday. The Canadian dollar and Mexican peso both fell sharply, while the euro and GBP faced downside pressures as the DXY index lurched upward. Markets largely ignored macro data sets and instead moved to account for the implementation of tariffs on Canada, China and Mexico. The DXY index is up 0.7% for the day. Markets are yet to fully price in the probability of a full-blown trade war and continue to hold out hope tariffs will be rescinded or forgiven, leaving ample room for volatility through the coming weeks leading into April and the application of the US reciprocal tariff program.

Our attentions remain affixed to trade headlines.

Expected Ranges

  • NZD/USD: 0.5580 - 0.5700 ▼
  • NZD/EUR: 0.5380 - 0.5450 ▼
  • GBP/NZD: 2.2250 - 2.2500 ▲
  • NZD/AUD: 0.8980 - 0.9080 ▼
  • NZD/CAD: 0.8080 - 0.8180 ▼

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.