Home Daily Commentaries NZD outperforms on promise of China stimulus

NZD outperforms on promise of China stimulus

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.

| Tuesday 18 March, 2025

Daily Currency Update

The New Zealand dollar outperformed its major counterparts on Monday, buoyed by a weaker USD, improved China activity data and no new tariff headlines. Chinese retail sales jumped 4% year-on-year while officials announced a 30-point plan to stimulate domestic consumption. Minimal details were supplied at the policy briefing yesterday, yet the plan has been described as the most comprehensive stimulus program in 50 years and a key pivot toward domestic demand, away from supply-led measures.

The NZD surged through US$0.58, a point of resistance, marking intraday highs at U$0.5820, a new 2025 peak. The NZD is also stronger against the AUD, GBP and euro while enjoying strong gains against an underperforming yen.

Our attention turns now to Canadian CPI and US 2nd tier data as risk sentiment and tariff headlines continue to dominate direction. We are wary of significantly extending NZD upside expectations ahead of the US reciprocal tariff review due in early April.

Key Movers

The US dollar fell through trade on Monday following a decline in treasury yields and a softer-than-expected retail sales report. Sales figures for February showed just a 0.2% uptick in activity, well short of expectations, while January data was revised lower. The softer print highlighted concerns of a slowdown in economic activity and does little to alleviate fears the US is pitching toward recession.

With the USD on the back foot, the euro and GBP enjoyed modest gains, up between 0.3% and 0.4%, while the yen failed to capitalise and underperformed allowing the USD to move back above 149.

Our attention turns now to Canadian inflation data and mid-level US macro data. Tariff headlines remain in focus while geopolitical forces will be front and centre as President Trump meets with Russian President Vladimir Putin with the hope of furthering a US-brokered peace plan. So far Russia has pushed back against US efforts to negotiate a ceasefire.

Expected Ranges

  • NZD/USD: 0.5750 - 0.5850 ▲
  • NZD/EUR: 0.5250 - 0.5380 ▲
  • GBP/NZD: 2.2200 - 2.2500 ▼
  • NZD/AUD: 0.9050 - 0.9150 ▲
  • NZD/CAD: 0.8250 - 0.8380 ▲

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.