- NZD/USD declines as the New Zealand Dollar comes under pressure from deepening deflationary concerns in China.
- The NZD weakened amid escalating global trade tensions after China’s retaliatory tariffs on US agricultural products took effect on Monday.
- US growth concerns grew after President Donald Trump described it as being in a “transition period,” signaling a potential slowdown.
NZD/USD extends its losing streak for the third successive day, trading around 0.5690 during the Asian hours on Tuesday. The pair continues to lose ground as the New Zealand Dollar (NZD) faces headwinds due to deflationary pressures deepened in China, highlighted by the steepest fall in consumer prices in 13 months in February and the 29th straight month of drop in factory-gate prices. Given China’s status as New Zealand’s largest trading partner, these developments have weighed on market sentiment.
Additionally, the NZD faced challenges as rising global trade tensions dampened investors’ risk appetite. China’s retaliatory tariffs of up to 15% on certain US agricultural products went into effect on Monday, in response to last week’s US tariff increase from 10% to 20% on Chinese imports.
However, the downside of the NZD/USD pair could be restrained as the US Dollar (USD) struggles amid concerns that tariff policy uncertainty could push the US economy into recession. US President Donald Trump characterized the economy as being in a “transition period,” hinting at a potential slowdown. Investors took his remarks as an early signal of possible economic turbulence in the near future.
Fed Chair Jerome Powell reassured markets that the central bank sees no immediate need to adjust monetary policy despite rising uncertainties. San Francisco Fed President Mary Daly echoed this sentiment, noting that increasing business uncertainty could dampen demand but does not justify an interest rate change.
With the Federal Reserve entering its blackout period ahead of the March 19 meeting, central bank c
