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- NZD/USD drifts lower to 0.5705 in Monday’s Asian session.
- Trump plans to announce new “reciprocal” tariffs on Wednesday, weighing on the Kiwi.
- The official Chinese Manufacturing PMI came in at 50.5 in March vs. 50.2 prior; non-manufacturing PMI rose to 50.8.
The NZD/USD pair edges lower to around 0.5705 during the Asian trading hours on Monday. The New Zealand Dollar (NZD) softens against the US Dollar (USD) as traders brace for the announcement of US President Donald Trump’s new tariff policy on Wednesday.
Trump is set to announce new “reciprocal” tariffs on Wednesday to tackle perceived trade imbalances, potentially adding more tariffs on Chinese goods. Trump has already placed a total of 20% tariffs on all Chinese imports since taking office in January, blaming Beijing for failing to do enough to curb the flow of chemicals used to make the deadly drug fentanyl into the US. Escalating trade tensions between the US and China might exert some selling pressure on the Kiwi, as China is a major trading partner to New Zealand.
The encouraging Chinese economic data might help limit the NZD’s losses. Data released by China’s National Bureau of Statistics (NBS) on Monday showed that the country’s Manufacturing Purchasing Managers’ Index (PMI) rose to 50.5 in March from 50.2 in February. The reading came in line with the market consensus. Additionally, the Non-Manufacturing PMI improved to 50.8 in March from the previous reading of 50.4, better than the estimation of 50.5.
Furthermore, the Chinese government has pledged more fiscal stimulus, increased debt issuance and further monetary easing. China’s finance ministry will also inject 500 billion yuan ($69 billion) into four of the nation’s largest state banks following through on Beijing’s earlier effort to strengthen the financial sector.
