NZD steady on further tariffs

Daily Currency Update

For most of yesterday’s trading session, the NZD traded within a tight range despite President Trump mentioning that he may add a 10% Tariff on China as soon as February 1. NZ CPI figures were broadly in line with expectations and as a result, not wasn't a great deal of movement. The market is however pricing in a potential RBNZ rate cut for the next meeting on February 19. The odds are 33% of a 0.25% cut and 67% chance of a 0.5% cut. A rise in the Global Dairy Trade (GDT) didn’t spark much upswing on the NZD.

China’s Ministry of Industry and Information Technology gave further insight into which industries would be specifically targeted for growth and the list included: steel, non-ferrous metals, petrochemicals, chemicals, building materials, machinery, automobiles, power equipment, light industry and electronics. It seems that higher specialisation in these fields would help to combat against future tariff threats.

The NZD reached a high of 0.5688 in the European trading session and slid slightly to open this morning around the 0.5664 mark.