NZD underperforms as promise of tariffs props up USD

Key Movers

There has been little movement across major currencies through the last 24 hours as markets continue to sideline major bets pending guidance on US tariffs and headline macro data. News flow was light, but President Trump did confirm the proposed 25% tariff to be imposed on Canada and Mexico would be postponed until the 2nd of April, pushed back from the 4th of March. He also noted that a 25% tariff will be applied to EU autos and “other things”. Markets continue to hold out hope that the US is simply using the threat of tariff’s as a bargaining chip for pushing its trade and geopolitical agenda’s. This remains a dangerous strategy, as the proposed tariffs are much broader than pre-election expectations had forecasted. The tariff impact is nowhere near fully priced in, as we move through March and into April there is ample scope for volatility. The euro slipped below 1.05 after Trump's comments, while the yen continues to gather support on lower US treasury yields forcing the USD below 149 and the GBP remains largely unchanged.

Our attentions today turn to US jobless claims, Q2 GDP data and durable goods orders with another eye affixed to tariff headlines.