The NZD/USD pair trimmed its earlier gains and was trading around 0.5650 during the Asian session on Wednesday. The currency pair remained steady following the release of China’s Services Purchasing Managers’ Index (PMI), which unexpectedly rose to 51.4 in February from 51.0 in January, surpassing market expectations of 50.8. Given New Zealand’s close economic ties with China, any significant shifts in the Chinese economy could influence the New Zealand Dollar (NZD).
The Reserve Bank of New Zealand (RBNZ) saw a leadership change as Governor Adrian Orr announced his resignation. Orr stated he was stepping down with inflation at target levels and the economy in a cyclical recovery following COVID-19 disruptions. Deputy Governor Christian Hawkesby will serve as acting governor until March 31, after which a temporary replacement will be appointed by New Zealand’s Finance Minister.
Meanwhile, the US Dollar (USD) is under pressure amid concerns over slowing economic growth and the impact of trade tariffs. President Donald Trump’s 25% tariffs on goods from Canada and Mexico were implemented on Tuesday, alongside a doubling of duties on Chinese imports to 20%.
In a Fox News interview, US Commerce Secretary Howard Lutnick suggested that Trump might reconsider his tariff policy within 48 hours of its implementation, particularly if the USMCA rules are followed. However, according to the New York Times, Trump has privately indicated he intends to maintain the tariffs.
The US Dollar Index (DXY), which measures the USD against six major currencies, is hovering around 105.70, as the USD continues to face downward pressure due to market speculation that Trump may eventually ease his stance on tariffs.
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