The NZD/USD currency pair continues near its five-month highs, trading around 0.5970, as investors pay close attention to US trade policy developments, especially given New Zealand’s substantial export relations with China. In spite of a recent surge, the New Zealand Dollar is rangebound due to anticipation of additional monetary easing by the Reserve Bank of New Zealand (RBNZ), which is expected to reduce rates in May. US trade tensions and the fear of the economic effects of tariffs on China have seen a weakening US Dollar, driving the NZD higher. At the same time, US economic indicators revealed a drop in initial jobless claims, but an increase in continuing claims, further affecting market sentiment.

KEY LOOKOUTS

• Any change in US trade policy, particularly with regards to tariffs on China, could have a major impact on the NZD/USD pair. With New Zealand having a strong export relationship with China, any increase or decrease in trade tensions will be closely monitored.

• Hopes of further monetary easing from the RBNZ, potentially in the form of a May rate cut, may bear down on the New Zealand Dollar. Traders will monitor any official commentary or economic releases that signal the central bank’s next action.

• Ongoing economic metrics, specifically labor market indicators such as jobless claims, will give indications of the strength of the US economy. A softer-than-anticipated US economy might add extra pressure on the US Dollar and give extra room for NZD upside.

• In light of prevailing market volatilities, any shift in global risk sentiment, for example, fears surrounding the economic impacts of US tariffs or geopolitical pressures, may impact investor demand for riskier currencies such as the NZD.

NZD/USD pair remains close to five-month highs at about 0.5970 as investors continue to watch events regarding US trade policy and their potential implications on New Zealand’s economy. The attention of the market is centered around US-China trade tensions, considering that New Zealand has a huge export relationship with China. The New Zealand Dollar is also under pressure due to anticipation of further easing by the Reserve Bank of New Zealand (RBNZ) and an anticipated rate cut in May. The US Dollar has been on the back foot with worries regarding the economic impact of tariffs and recent US labor market statistics, indicating a reduction in initial jobless claims but an upsurge in continuing claims, contributing to the uncertainty. As volume has been sparse to date given the Good Friday holiday, NZD/USD will likely realize higher levels should the US Dollar soften further but there is a great deal hanging on the further progression of trade policy and the unfolding of economic fundamentals in the days ahead.

The NZD/USD currency pair continues to trade close to its five-month highs around 0.5970 as concerns over US trade policy rise and anticipation of further monetary relaxation by the Reserve Bank of New Zealand grows. The New Zealand Dollar is bolstered by a weaker US Dollar as trade tensions and economic indicators continue to affect market sentiment.

• The NZD/USD currency pair is trading close to its five-month high, at 0.5970, following seven consecutive days of increases.

• Market participants are keenly observing US trade policy news, especially with regards to China, since New Zealand’s economy is greatly dependent on exports to China.

• US-China trade tensions may impact the NZD/USD pair, particularly following US President Trump’s statement regarding the possibility of not imposing additional higher tariffs on China.

•  Recent US economic statistics, such as a fall in initial jobless claims and a rise in continuing claims, are influencing market sentiment and supporting a weaker USD.

• The Reserve Bank of New Zealand (RBNZ) is likely to further ease monetary policy, with markets already pricing in a rate cut in May, which may pressure the NZD.

• The US Dollar has weakened on fears over the economic consequences of tariffs, offering a chance for the NZD to firm up.

• Volumes in trading are bound to be light because of the Good Friday holiday, which might result in lesser market volatility in the short term.

NZD/USD currency pair is trading around its five-month highs as of now, indicating a spell of relative stability in spite of continued global uncertainty. Investors are especially interested in the evolution of US trade policy, with keen interest in the possible effects of trade relations between the US and China, in light of New Zealand’s high export connections with its biggest trading partner. While the New Zealand Dollar has been able to remain robust, much of its movement is influenced by external forces, including changes in US economic strategy and general market sentiment.

NZD/USD DAILY PRICE CHART

CHART SOURCE: TradingView

Concurrently, sentiment around the monetary policy moves by the Reserve Bank of New Zealand is shaping the outlook for the New Zealand Dollar. With inflation remaining within the target band for the central bank, there is speculation that more easing measures might be in store. This interplay, together with a normally subdued trading session on account of the Good Friday holiday, indicates that while there is conservative optimism surrounding the NZD, its future directions will be greatly dependent on both global trade evolution and domestic economic choices.

TECHNICAL ANALYSIS

NZD/USD pair is testing resistance around the five-month high of 0.5979, and it looks promising to see further potential for upside if the price can continue above this point. The pair has been exhibiting steady upward motion during the last week, with gains for seven straight days, which may be a sign of a bullish trend. Yet, as the pair lingers around crucial resistance, the traders will keenly observe for a breakout or a pullback. Support levels at 0.5900 may serve as a cushion on a reversal, while any change in market mood, especially in relation to US trade policy or the Reserve Bank of New Zealand’s policy direction, may drive the pair in the short term.

FORECAST

NZD/USD pair may experience additional upside if the US Dollar remains weak on the back of continuing trade tensions and the economic cost of US tariffs. With New Zealand’s robust export correlation with China, any good news from US-China trade negotiations could benefit the New Zealand Dollar. Also, if the Reserve Bank of New Zealand shifts to a more dovish policy and lowers rates over the coming months, the NZD may still hold some strength if market conditions continue to be favorable. The duo may breach the five-month peak of 0.5979 and probe higher resistance levels, targeting 0.6000 or higher if the US Dollar continues to weaken.

Alternatively, the NZD/USD may be under pressure if the US Dollar gains strength, particularly if the US economy proves resilient or the Federal Reserve is more aggressive in its stance. Any rise in global trade tensions, especially if US tariffs against China increase, would have adverse effects on risk sentiment and could weigh on the NZD. Furthermore, if more aggressive rate cuts are chosen by the Reserve Bank of New Zealand, this will undermine confidence in the NZD and result in a possible reversal towards support levels around 0.5900 or lower. A change in market sentiment or some unexpected economic stimulus can also lower the pair.