The New Zealand Dollar (NZD) gained momentum early on Monday, rising to around 0.5745 against the US Dollar (USD). The Kiwi’s strength is attributed to a weaker Greenback and the prospect of stimulus measures from China aimed at bolstering its economy.
The US Dollar continues to face selling pressure amid growing concerns over the potential negative impact of US President Donald Trump’s trade policies on the country’s economic growth. Trump has announced that April 2 will mark “Liberation Day” for the US, a day when his administration plans to implement reciprocal tariffs to equalize US tariffs with those of its trading partners. These tariffs will affect various sectors, including automobiles, pharmaceuticals, and semiconductors.
On the flip side, the NZD found support from Chinese stimulus plans, which were unveiled by the ruling Chinese Communist Party’s central committee and state council. The ambitious initiatives aim to boost consumption through higher wages and reduced financial burdens, designed to restore consumer confidence and revive China’s struggling economy. Given that China is a key trading partner for New Zealand, these measures could have a positive spillover effect on the NZD.
Traders are now awaiting the preliminary results of the US S&P Global Manufacturing Purchasing Managers Index (PMI) for March, which could offer further direction for the USD and impact the NZD/USD pair later in the day.
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