The New Zealand Dollar (NZD) advanced for a fourth straight session on Monday, with the NZD/USD pair trading around 0.5840 during the Asian hours. The Kiwi gained ground as the US Dollar (USD) remained under pressure following a key trade policy announcement by US President Donald Trump and upbeat Chinese trade data.
Trump eased market fears late Sunday by confirming that semiconductors and electronics imported from China will remain subject to the existing 20% fentanyl-related tariffs, rather than the previously rumored 145% hike. The clarification provided relief to global markets and buoyed risk-sensitive currencies like the NZD.
China Trade Data Lifts NZD on Signs of Resilience
Further fueling the NZD’s strength were March trade figures from China, New Zealand’s largest trading partner. China’s trade surplus soared to CNY 736.72 billion in Yuan terms, up sharply from February’s CNY 122 billion. In US Dollar terms, the surplus reached $102.6 billion, surpassing expectations of $77 billion, despite being down from the previous $170.51 billion.
Export growth accelerated to 13.5% year-over-year from 3.4% in February, while the decline in imports narrowed to 3.5% from 7.3%. These figures signal resilience in China’s external sector despite mounting geopolitical and trade pressures, a positive development for the export-driven New Zealand economy.
China’s General Administration of Customs acknowledged global headwinds, describing the external environment as “complex and severe,” but remained confident in the country’s trade momentum. Officials emphasized continued efforts to defend national sovereignty and counter US trade actions if necessary.
US Dollar Slides on Weaker Data, Dovish Fed Sentiment
The US Dollar Index (DXY) fell for the third consecutive session, approaching the 99.50 mark and inching closer to Friday’s three-year low of 99.01. The Greenback’s decline reflects broad-based investor caution amid mixed US macroeconomic indicators and an increasingly dovish outlook from the Federal Reserve.
March’s Producer Price Index (PPI) rose 2.7% annually, easing from 3.2% in February, while the core rate slowed to 3.3%. The cooling inflation data adds to expectations that the Fed could resume its rate-cutting cycle later this year.
Highlighting the growing concern over trade-related uncertainty, Minneapolis Fed President Neel Kashkari told CBS’ Face the Nation that the ongoing US-China tensions represent the most significant blow to economic confidence since the early days of the COVID-19 pandemic. “This is the biggest hit to confidence that I can recall in the 10 years I’ve been at the Fed—except for March 2020,” Kashkari said.
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