Home Daily Commentaries NZD underperforms as tariffs again take centre stage

NZD underperforms as tariffs again take centre stage

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 9 July, 2025

Daily Currency Update

The New Zealand dollar underperformed on Tuesday amid further tariff uncertainty. With little of note on the domestic ticket, the NZD tracked a narrow range, bouncing between US$0.60 and US$0.6030 before trending lower through overnight trade. Equities and risk assets came under pressure as President Trump announced a series of punitive tariffs will be issued on August 1, against trading partners that have not “cooperated”, doubling down and confirming the deadline will not be moved again. With Trump also announcing plans to issue a 50% tariff on copper and 200% tax on pharmaceuticals, markets again were forced to look toward haven assets, driving the NZD toward intraday lows near US$0.5980. While finding support, the NZD failed to rebound back above US$0.60 and opens this morning at US$0.5997.

Our focus turns now to the RBNZ policy meeting. We expect rates to be left unchanged, the first pause in the easing cycle since rate cuts began in August last year. With no forecast updates available at this meeting, we are attuned to the bank’s assessment of conditions and future policy decisions. At present, the market has priced a further 40 points of cuts into the end of the year, thus a shift toward a neutral setting may be enough to propel the NZD higher.

Key Movers

Against a backdrop of broader US dollar support, the Japanese yen was the weakest of the majors during Tuesday's session, as markets continue to absorb the impacts of the higher tariff rate, announced by President Trump on Monday. While the deadline for their implementations has been extended from today (July 9) to August 1, President Trump made it clear that no further extension will be afforded. He did concede the 25% tax on exports to the US was not 100% firm and there was room for negotiation. With Japan just weeks away from a federal election, there is growing concern a revised trade agreement will not be reached. The USD is up three tenths of a percent against the yen.
In other news, the euro edged marginally higher, up 0.1% and back above 1.1720 while sterling edged lower.

Our attention today turns to the FOMC meeting minutes for June and ongoing trade/tariff headlines.

Expected Ranges

  • NZD/USD: 0.5950 - 0.6080 ▼
  • NZD/EUR: 0.5080 - 0.5200 ▼
  • GBP/NZD: 2.2500 - 2.2800 ▼
  • NZD/AUD: 0.9150 - 0.9300 ▼
  • NZD/CAD: 0.8150 - 0.8250 ▼

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.