NZD/USD Faces Pressure Below 0.5700 as Tariff Tensions with Trump Weigh, Along with Mixed PMI from China
The NZD/USD continues to be in pressure below the 0.5700 levels as risk aversion increases with Trump’s advisors stating that the administration is considering 25% tariffs on Mexico and Canada. While Colombia dodged sanctions due to its commitment to US terms, the Kiwi remains under pressure after mixed PMI data from China indicated weaker economic activity in one of New Zealand’s main trading partners. China did not manage to spur its equity markets with an investment program valued at 52 billion Yuan as the Kiwi could not overcome losses made as the US Dollar Index DXY broke above its lows and traded close to 107.70. KEY LOOKOUTS • Monitor for the updates of the mooted 25% tariffs by Trump’s advisories so that they may fuel further risk aversion, which would impact global trade dynamics. • Pay close attention to the influence of weak readings from Chinese Manufacturing (49.1) and Non-Manufacturing PMI (50.2) on New Zealand’s trade and economic prospects. • US Dollar Index (DXY) is staging a recovery from its monthly lows, currently situated at near 107.70 levels, which may weight on NZD/USD further. • Watch for China’s 52-billion-Yuan stock investment program’s success in reviving its equity market and whether it is supporting risk-sensitive assets like NZD. The NZD/USD currency pair continues to face selling pressure and trading below 0.5700 as risk sentiment weakens amid escalating trade tensions and disappointing economic data. The voted proposals of imposing 25% tariffs on Mexico and Canada, advocated by the advisers of Trump, have raised market uncertainty whereas mixed Chinese PMI figures hint at a slowdown in New Zealand’s key trading partner’s economy. Manufacturing PMI for China slipped to 49.1, indicating contraction and its Non-Manufacturing PMI also slipped to 50.2, barely in expansion territory.”. Meanwhile, the US Dollar Index (DXY) has rebounded from its monthly lows, further weighing on the risk-sensitive NZD, despite China’s stimulus efforts to support its equity markets. These combined factors continue to challenge the pair, keeping it under significant selling pressure. The NZD/USD pair continues to be under pressure below 0.5700 due to rising trade tensions, including the reported US tariffs on Mexico and Canada and weak Chinese PMI data that are weighing on sentiments. The US Dollar’s rebound and limited impact of China’s stimulus measures are further challenging the risk-sensitive Kiwi. • Increasing backing among Trump’s advisors for 25% tariffs on Mexico and Canada has increased the sense of risk aversion in the market. • Tensions eased after Colombia agreed to US terms, avoiding sanctions and returning diplomatic stability. • China’s Manufacturing PMI declined to 49.1, indicating contraction, while Non-Manufacturing PMI fell to 50.2, barely holding above expansion. • Weak Chinese economic data weighs heavily on the NZD, given China’s significant trade ties with New Zealand. • The US Dollar Index (DXY) has rebounded to 107.70, further pressuring the NZD/USD pair. • New stimulus efforts worth 52 billion Yuan are aimed at reviving China’s equity markets but provide little support to the Kiwi. • Global risk aversion continues to plague the NZD/USD pair, pushing it below key support levels. The NZD/USD pair remains under heavy selling pressure, trading below 0.5700 amid escalating trade tensions and weak economic signals. The risk-sensitive Kiwi has taken a beating as the advisors of Trump push for 25% tariffs on Mexico and Canada, further creating uncertainty in the world economies and investor sentiment. Although tension with Colombia faded somewhat after that country agreed to US demands, trade policies remain a heavy burden for the market. Adding to the bearish tone, mixed Chinese PMI data shows a slowdown in New Zealand’s major trading partner as Manufacturing PMI shrinks at 49.1 and Non-Manufacturing PMI expands at a slow rate of 50.2. NZD/USD Daily Chart TradingView Prepared by ELLYANA Furthermore, the US Dollar Index (DXY) has surged to 107.70, with the rebound yielding to safe-haven demand and limiting a potential recovery for the NZD. Risk sentiment remains lackluster and unmoved by China’s new stimulus measures, which included a 52 billion yuan investment in equity markets. With aversion to risk being dominant, the NZD/USD pair remains at risk and vulnerable at the hands of broader market sentiment and updates on global trade policies that will dictate near-term moves. TECHNICAL ANALYSIS NZD/USD still moves under bearish influence, below the main key resistances in place around 0.5700. The price could not reapproach the moving average line that started to function at 50-days, confirming another fall on this side. Strong support remains to be 0.5660, a penetration level that might let the pair test the lows seen around 0.5600. On the positive side, resistance at 0.5725 needs to be cleared for any meaningful recovery, though broader bearish trends limit upside potential. The RSI hovers near oversold territory, suggesting a potential for short-term consolidation; however, overall momentum indicators, including the MACD, point to sustained bearish pressure. Traders should watch for any break of key support or resistance levels for directional cues. FORECAST The NZD/USD pair is likely to stay under pressure in the short term as the downside risks are more than any immediate recovery prospects. Risk aversion, fueled by rising US trade tensions with Mexico and Canada and weak Chinese economic data, will likely cap upside movements. If the pair breaks below the key support level of 0.5660, it could slide further and test the 0.5600 level. Weak global risk sentiment and a rising US Dollar Index (DXY) only make things worse for the Kiwi, as it is difficult to hold any rallies. On top of that, if China’s PMI numbers continue to show contractionary signs, then the NZD/USD pair might see further downward pressure. But on the other hand, if market sentiment improves or if some positive news comes regarding global trade policies, then there might be a slight bounce. Should the pair break above resistance at 0.5725, it could gain momentum to test higher levels around 0.5800. Improved risk appetite, effective implementation of China’s stimulus measures, or signs of Chinese economic stabilization should support the Kiwi. Any upside