The New Zealand Dollar (NZD) halted its two-day losing streak on Friday, with the NZD/USD pair trading around 0.5890 during the Asian session. The Kiwi gained traction following the release of upbeat inflation expectations from the Reserve Bank of New Zealand (RBNZ) and improving global trade sentiment.
Inflation expectations for the second quarter of 2025 rose to 2.29%, up from 2.06% in the previous quarter, reflecting a firmer outlook among business managers for annual consumer price growth two years ahead. Supporting the positive momentum, the Business NZ Performance of Manufacturing Index (PMI) climbed to 53.9 in April, compared to 53.2 in March, signaling expansion in the sector.
The NZD, known for its sensitivity to global risk sentiment, also benefited from easing trade tensions between the United States and China. A preliminary deal was reportedly reached, under which Washington will reduce tariffs on Chinese imports from 145% to 30%, while Beijing plans to slash duties on U.S. goods from 125% to 10%. Market optimism has been further lifted by renewed hopes for progress in U.S.-Iran nuclear negotiations.
In contrast, recent U.S. economic data painted a mixed picture. While the broader economy continues to show resilience, signs of slowing momentum have kept the U.S. Dollar in a tight trading range.
The U.S. Producer Price Index (PPI) for April rose 2.4% year-over-year, a deceleration from March’s 2.7% increase and slightly below the market expectation of 2.5%. Core PPI, which strips out volatile food and energy prices, rose 3.1% annually, easing from 4% previously. On a monthly basis, headline PPI dropped 0.5%, while core PPI slipped 0.4%.
Meanwhile, initial jobless claims for the week ending May 10 remained unchanged at 229,000, in line with both the prior week’s revised figure and analyst expectations.
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