S&P 500 — US Large Cap Index
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IPC Index — Mexico Market- NZD/USD edges lower to near 0.5950 in Monday’s Asian session.
- China announced further measures to boost economic growth and employment.
- The RBNZ is expected to cut its 3.5% OCR by 25 bps in the May meeting.
The NZD/USD pair softens to around 0.5950 during the Asian trading hours on Monday, pressured by the renewed US Dollar (USD) demand. Signs that global trade tensions between the United States and China may be easing provide some support to the Greenback. Traders assess China’s press conference about policies and measures on Monday.
The Politburo emphasized efforts to maintain stability by supporting firms and workers most affected by US tariffs, according to Friday’s statement. The National Development and Reform Commission, Ministry of Human Resources and Social Security, Ministry of Commerce and People’s Bank of China (PBOC) on Monday reiterated plans to accelerate debt issuance, ease monetary policy and vowed to support employers to safeguard jobs.
Chinese authorities announced further measures to prompt economic growth and employment. They will closely monitor domestic and external changes and improve the policy toolkit. Beijing added that some new policies will be rolled out in the second quarter. This, in turn, could lift the China-proxy Kiwi, as China is a major trading partner to New Zealand.
US Agriculture Secretary Brooke Rollins said on Sunday that the Trump administration is having daily talks with China over tariffs. Rollins further stated that there were ongoing talks between the US and China and that trade negotiations with other nations were “very close.” The easing fears of trade tensions underpin the Greenback and act as a headwind for the NZD/USD pair for the time being.
Meanwhile, the rising bets of further rate cuts from the Reserve Bank of New Zealand (RBNZ) might weigh on the New Zealand Dollar (NZD). The markets fully expect the RBNZ to cut its 3.5% OCR by 25 basis points (bps) in May, with a further reduction to 2.75% by year-end.
