- NZD/USD gains ground as the US Dollar depreciates following the Trump’s new tariff threats.
- President Trump plans to increase import tariffs from 25% to 50% to secure the US steel industry.
- RBNZ’s Karen Silk said that rates are now within the neutral 2.5%–3.5% range following last week’s rate cut.
NZD/USD appreciated by more than 0.50%, trading around 0.6000 during the Asian hours on Monday. The pair rises as the US Dollar (USD) remains softer amid increasing concerns regarding slow growth and renewed inflation in the United States (US).
On Friday, President Trump said at a rally in Pennsylvania that he planned to double import tariffs on steel and aluminum to build up pressure on global steel producers and intensify trade war. “We are going to be imposing a 25% increase. We’re going to bring it from 25% to 50% – the tariffs on steel into the United States of America, which will even further secure the steel industry in the United States,” he said, per Reuters.
Additionally, the US Court of Appeals for the Federal Circuit in Washington, on Thursday, temporarily allowed President Trump’s tariffs to take effect. The decision has reversed a Wednesday’s judgement made by a three-judge panel at the Court of International Trade in Manhattan to halt Trump from imposing “Liberation Day” tariffs from taking effect. The federal court found that Trump exceeded his authority in imposing broad import tariffs and declared the executive orders issued on April 2 unlawful.
The Reserve Bank of New Zealand (RBNZ) Assistant Governor Karen Silk said that interest rates are now within the neutral 2.5%–3.5% band after reducing Official Cash Rate (OCR) by 25 basis points last week. Silk also noted that full effects of past rate cuts still remains to be felt in the domestic economy. Further policy decision will be data dependent, she added.
