NZD/USD Edges Towards 0.5950 After Trump Extends China Tariff Suspension

Kiwi Gains as US Delays Tariffs on China

The NZD/USD currency pair advanced slightly to around 0.5940 in early Asian trading on Tuesday, as investor sentiment turned positive following news that President Donald Trump extended the China tariff suspension by another 90 days. The move came just hours before the previous truce was set to expire.

According to a late Monday report by Reuters, the Trump administration agreed to delay the imposition of new broad tariffs on Chinese goods, providing much-needed relief to markets already sensitive to geopolitical and trade-related developments. This decision helps reduce near-term trade tension between the world's two largest economies.

China Responds with Reciprocal Tariff Pause

In response, China's Commerce Ministry also announced it would suspend additional tariffs on US imports for the same 90-day period. The coordinated pause in tariff escalation has injected a dose of optimism into currency markets, particularly boosting the New Zealand Dollar, which often acts as a proxy for Chinese economic sentiment due to strong trade ties between the two nations.

Focus Shifts to US Inflation Data

While the Kiwi gains ground, traders are now shifting their attention to the upcoming US Consumer Price Index (CPI) report for July, scheduled for release later today. The inflation data could heavily influence the US Dollar and determine whether the current NZD/USD momentum will be sustained or reversed.