NZD/USD remains under selling pressure below 0.5750 amid Trump's new tariffs

NZD/USD faced some selling pressure during early Asian trading on Thursday, trading near 0.5730. The New Zealand dollar (NZD) weakened against the U.S. dollar (USD) as U.S. President Donald Trump announced reciprocal tariffs, further escalating the trade war.

Trump said on Wednesday he would impose a base tariff of 10% on all goods imported into the United States (US) and impose higher tariffs on some of the country's largest trading partners. A White House official said Trump will impose a total tariff rate of 54% on imports from China, starting April 9.

Chinese imports are already subject to a 20 percent tariff. According to the official, an additional 34% reciprocal tariff will also be imposed. A potential trade war and economic uncertainty between the United States and China could weigh on the New Zealand dollar, a proxy for China, as China is New Zealand's main trading partner.

On the other hand, traders increased bets that the Federal Reserve will start cutting interest rates in June and expect a total of three quarter-point cuts by October as Trump unveiled new import tariffs that analysts expect could push up inflation but also could slow economic growth.

Short-term interest rate futures are currently pricing in a nearly 70% chance of a rate cut at the Fed’s June meeting, compared with about 60% before the tariffs were announced, according to the CME FedWatch tool. This, in turn, could weaken the US dollar and create favorable conditions for the pair.