Home Daily Commentaries NZD outperforms in face of rising trade tensions

NZD outperforms in face of rising trade tensions

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.

| Thursday 13 March, 2025

Daily Currency Update

The New Zealand dollar edged upward through trade on Wednesday and was among the best performing majors despite rising trade tensions. There is a lot to digest this morning, but the main theme of the last 24 hours remains US trade policy. The Trump administration's 25% tariffs on steel and aluminium are now in effect, and with the European Union and Canada issuing retaliatory tariffs, President Trump is vowing to retaliate to their retaliation. Despite trade tensions escalating, US inflation pressures easing and Russia pushing back on any short-term push for a truce, risk sentiment remained relatively stable with equities and risk assets in the green for much of the day. The NZD pushed back above US$0.57, marking intraday highs at US$0.5732. It also ended its recent losing streak against the euro, trading back above 0.5250, and enjoying a half percent gain against the yen.

With little headline data on the macro ticket, our attentions remain with US trade headlines and geopolitical tensions.

Key Movers

Price action among the majors was mixed through trade on Thursday, as the US dollar index was up on the day, led by declines in the euro and yen. US trade policy was again front and centre, with Trump’s 25% tariff on steel and aluminium taking effect. EU officials immediately retaliated, imposing measures on goods worth around €26 billion, while Canada set in motion its own tariff measures on 30 billion in US exports. President Trump has threatened to respond, elevating fears a global trade war is inevitable. The euro gave up 0.4% sliding back below US$1.09, while the CAD found support edging back above US$0.6950, despite the Bank of Canada (BoC) lowering interest rates. The BoC cut rates by 25 points, but noted it would now proceed with caution, as trade tensions will likely add some upward pressure on inflation and potentially limit the scope for further rate cuts this year.

With the macroeconomic docket offering only mid-tier data, our attentions remain with US trade policy.

Expected Ranges

  • NZD/USD: 0.5680 - 0.5780 ▲
  • NZD/EUR: 0.5220 - 0.5320 ▲
  • GBP/NZD: 2.2420 - 2.2720 ▼
  • NZD/AUD: 0.9000 - 0.9100 ▼
  • NZD/CAD: 0.8180 - 0.8280 ▼

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.