NZD/USD Falls to 0.5935 on US-China Trade Tensions and Strong USD

NZD/USD Nears 0.5935 Amid US-China Trade Tensions and Strong USD

The NZD/USD currency pair dropped to around 0.5935 during Thursday’s Asian session, pressured by renewed US-China trade tensions and a firm US Dollar (USD). The pair faces resistance near 0.5950 as sellers remain limited.

US-China Trade Tensions Weigh on NZD

Tensions escalated after the Trump administration suspended some sales of critical US technologies to China, including those used in jet engines, semiconductors, and chemicals. This move is a response to China’s export restrictions on key minerals to the US, which threaten supply chains and add pressure on trade relations.

Since China is one of New Zealand's largest trading partners, these developments negatively impact the Kiwi dollar (NZD). You can read more about how trade tensions affect global currencies.

RBNZ Cuts Official Cash Rate by 25 Basis Points

On Wednesday, the Reserve Bank of New Zealand (RBNZ) lowered the Official Cash Rate (OCR) by 25 basis points to 3.25%, in line with market expectations. However, the suggestion that the RBNZ may be closer to the end of its easing cycle than anticipated helped limit losses in the Kiwi.

Market expectations for a rate cut in July have dropped to around 36%, down from 60% previously.

Upcoming US GDP Data in Focus

Traders now await the first reading of the US Q1 Gross Domestic Product (GDP) Annualized, which is expected to show a 0.3% contraction. This data, along with other key economic indicators, will influence the USD and may impact the NZD/USD pair further.

For more on the US economic outlook, visit our US GDP analysis page.