NZDUSD Dips Amid Dollar Surge and Trump Policy Plans

On Tuesday, the New Zealand dollar traded at around $0.595. This decline was due to the strengthening of the US dollar following the US election. President-elect Donald Trump’s proposed policies—such as tariffs, deportation, and tax cuts—could lead to higher inflation. Consequently, the Federal Reserve might find it harder to lower interest rates.

China Woes Hit New Zealand Dollar Hard

Moreover, China’s weak economic data and an underwhelming stimulus plan added more pressure on the New Zealand dollar. This is significant because China is New Zealand’s largest trading partner.

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At home, there is increasing concern that the Reserve Bank of New Zealand may announce a larger interest rate cut of 75 basis points later this month. Since there is a long gap between central bank meetings, and the market already expects a 50 basis point cut, a more aggressive cut is possible.

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Ethan O. Miller

Ethan O. Miller is a seasoned Forex analyst. His insightful articles offer a unique perspective on currency trends, aiding both novice and experienced traders in navigating the Forex market.

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