- NZD/USD bounces back and turns positive to near 0.5680 as the US Dollar faces a strong sell-off.
- Investors assess the US economic outlook amid an escalating global trade war.
- RBNZ Adrian Orr resigned before the completion of his second five-year term
The NZD/USD pair recovers its intraday losses and turns positive in European trading hours on Wednesday. The Kiwi pair rises to near 0.5680 as the US Dollar (USD) extends its downside, with investors assessing the United States (US) economic outlook amid intensifying President Donald Trump-led-global trade war.
The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, slumps to near 105.00. Investors expect the inflationary impact of Trump’s tariffs will reduce the purchasing power of individuals. Such a scenario would weigh on economic growth.
China has announced retaliatory tariffs on the US for imposing an additional 10% levies on them, which went into effect on Tuesday. The consequences of escalation in trade war between China and the US will also be borne by the New Zealand (NZ), given its significant reliance on exports to China.
In the domestic region, Reserve Bank of New Zealand (RBNZ) Adrian Orr resigned three years before the completion of his second five-year term.
In Wednesday’s session, investors will focus on the US ADP Employment and the ISM Services PMI data for February, which will be published in the North American session. Economists expect private employers to have 140K fresh workers, lower than 183K payrolls seen in January. The Services OMI, which gauges activities in the services sector, is estimated to have fallen to 52.6 from 52.8 in January. The US economic data will influence market expectations for the Federal Reserve’s (Fed) monetary policy outlook.
