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- NZD/USD continues to gain traction as the US Dollar loses ground, with traders keeping a close eye on ongoing US-China trade developments.
- President Trump commented on tariffs, raising concerns for US companies contemplating the shift of production back from China.
- A potential uptick in the unemployment rate in New Zealand could bolster expectations for additional monetary easing by the RBNZ.
The NZD/USD pair continues to climb for the second straight session, trading near 0.5970 during Monday’s Asian hours. The Kiwi pair gains momentum as the US Dollar (USD) weakens, with traders closely monitoring developments in US-China trade relations.
Over the weekend, US President Donald Trump confirmed that trade negotiations were ongoing, although he clarified that no direct talks with Chinese President Xi Jinping are scheduled for this week. On Friday, China’s Commerce Ministry indicated it is reviewing a US proposal to restart trade discussions.
Trump’s latest remarks on tariffs have also caught market attention, particularly for US companies considering reshoring production from China. Speaking on Sunday, he acknowledged the economic impact of steep tariffs, stating, “At some point, I’m going to lower them, because otherwise, you could never do business with them, and they want to do business very much.”
Meanwhile, Friday’s US Nonfarm Payrolls (NFP) report showed the economy added 177,000 jobs in April—beating expectations of 130,000, though down from a revised 185,000 in March. The unemployment rate held steady at 4.2%, and average hourly earnings grew 3.8% year-over-year, matching the previous month.
In New Zealand, attention shifts to upcoming labor market data, with forecasts pointing to a rise in the unemployment rate. Such an outcome could reinforce expectations of further monetary easing by the Reserve Bank of New Zealand (RBNZ). Markets have fully priced in a 25 basis point rate cut at the RBNZ’s meeting later this month, with interest rates projected to bottom out at 2.75% by October.
