The New Zealand Dollar (NZD) continued its upward momentum for the sixth consecutive session on Monday, trading near 0.5970 during the Asian session. The Kiwi’s strength is largely attributed to broad-based US Dollar (USD) weakness, driven by mounting fears over the economic impact of the United States’ expanding tariff regime.
Investor sentiment towards the NZD received a further boost after the People’s Bank of China (PBoC) held its benchmark Loan Prime Rates steady on Monday, leaving the one-year rate at 3.10% and the five-year rate at 3.60%. The decision signaled stability in monetary policy from China, New Zealand’s top trading partner, and helped maintain investor confidence in the region’s economic prospects.
Adding to the positive tone, the White House announced exemptions for several key technology products—primarily manufactured in China—from the latest round of proposed reciprocal tariffs. The move was seen as a concession aimed at easing trade tensions and is likely to benefit New Zealand indirectly by preserving trade flow stability with China.
However, tensions remain elevated. The US has imposed tariffs on Chinese vessels docking at American ports, a decision that could significantly disrupt global shipping logistics and intensify the US-China trade standoff.
On the political front, speculation swirled last week after reports emerged that President Donald Trump is increasingly dissatisfied with Federal Reserve Chair Jerome Powell’s leadership, even exploring the possibility of removing him. While markets initially brushed off the rumors, White House economic adviser Kevin Hassett later confirmed Trump is weighing his options, introducing an element of uncertainty into monetary policy outlooks.
Meanwhile, the US Dollar Index (DXY) plunged over 0.50%, trading around 98.50—its lowest level since April 2022—adding further fuel to the NZD/USD rally. With growing doubts over US economic leadership and global trade tensions, the Kiwi appears well-positioned to retain support in the near term, barring any sudden shifts in geopolitical or monetary dynamics.
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