NZD/USD falls further below 0.5750 as US tariffs loom

NZD/USD extended losses during early Asian trading on Tuesday, falling to around 0.5725. The New Zealand dollar (NZD) slipped to a one-week low on concerns about an April 2 deadline for reciprocal tariffs from the United States.

Trump said late Monday he would announce tariffs on auto imports in the next few days and said some countries would receive reciprocal tariff relief on April 2. Trump hinted there could be "flexibility" in the tariff plan and that some trading partners could receive exemptions or relief. However, confusion over Trump’s planned tariff announcement on April 2 could weigh on the NZD against the U.S. dollar (USD).

Economists expect the Reserve Bank of New Zealand (RBNZ) to cut the official cash rate (OCR) further at each of its upcoming meetings, despite last week's unexpectedly positive GDP report. "So far, the inflation outlook remains comfortable for the RBNZ. The likelihood of a 25 basis point rate cut in both April and May is very high," ASB chief economist Nick Tuffley said.

Meanwhile, a new Chinese stimulus measure could help limit the New Zealand dollar’s losses, given China’s key role as New Zealand’s main trading partner. The Communist Party of China Central Committee and the State Council announced ambitious plans to "actively promote consumption" by raising wages and reducing financial burdens, in their latest attempt to boost consumer confidence and revive their sagging economy.