The NZD/USD pair saw modest gains, trading around 0.5765 during the early hours of Friday’s Asian session, predominantly due to a weaker US dollar. Investors are closely monitoring the upcoming preliminary reading of the US S&P Global Purchasing Managers Index (PMI) for February, which is expected later in the day.
Recent labor market data from the US has raised concerns about the strength of the economy. The Department of Labor reported that Initial Jobless Claims for the week ending February 15 increased to 219,000, slightly above the revised figure of 214,000 from the previous week, which was adjusted from an earlier estimate of 213,000. This uptick was higher than analyst expectations, which had forecasted claims to hit 215,000, contributing to the dollar’s decline.
Meanwhile, the Reserve Bank of New Zealand recently made a significant policy decision, cutting interest rates by 50 basis points to 3.75%. This move was anticipated by the market, and RBNZ officials indicated that additional rate reductions could follow in the upcoming months. The central bank’s effort aims to stimulate the economy amid signs of slowing inflation. Analysts noted that the New Zealand dollar might benefit from expectations that the easing cycle could end sooner than initially anticipated.
Despite this positive momentum, concerns about potential tariffs from the US government loom large. The announcement by former President Trump regarding the introduction of additional tariffs on a range of good — including lumber, cars, semiconductors, and pharmaceuticals — may place downward pressure on the New Zealand dollar. The looming tariffs create uncertainty, which could influence trading strategies and market sentiment in the coming weeks.
