In Monday's Asian session, the NZD/USD exchange rate recovers to about 0.5740.
According to Trump, we will get along with China.
The RBNZ stated that it is still amenable to additional rate cuts.
During Monday's Asian trading hours, the NZD/USD pair gains ground and approaches 0.5740. As traders believe that the United States (US) will moderate its recent escalation of the trade war with China, the New Zealand dollar (NZD) gains strength versus the US dollar (USD).
In response to new export restrictions Beijing is preparing for important rare earth minerals, US President Donald Trump warned Friday to impose an additional 100% tariff on Chinese goods starting November 1. Trump moderated his rhetoric on Sunday, stating that the US wants to "assist China, not harm it" and that the Chinese economy "will be OK."
Since China is one of New Zealand's biggest economic partners, reducing trade tensions between the two biggest economies in the world helps the China-proxy Kiwi.
In the meantime, the third week of the US government shutdown has begun. The Senate will not hold any votes until Tuesday, as Congress is still unable to agree on a funding proposal. In the short run, a protracted US federal shutdown may depress the greenback and provide as a tailwind for the pair.
However, the Reserve Bank of New Zealand's (RBNZ) dovish approach could make the NZD weaker compared to the USD. Last week, the central bank of New Zealand aggressively lowered its benchmark rate by 50 basis points (bps), with the possibility of additional reductions. At the next interest rate decision in November, financial markets are now pricing in a virtually additional 25 basis point decrease to 2.25%.
According to Trump, we will get along with China.
The RBNZ stated that it is still amenable to additional rate cuts.
During Monday's Asian trading hours, the NZD/USD pair gains ground and approaches 0.5740. As traders believe that the United States (US) will moderate its recent escalation of the trade war with China, the New Zealand dollar (NZD) gains strength versus the US dollar (USD).
In response to new export restrictions Beijing is preparing for important rare earth minerals, US President Donald Trump warned Friday to impose an additional 100% tariff on Chinese goods starting November 1. Trump moderated his rhetoric on Sunday, stating that the US wants to "assist China, not harm it" and that the Chinese economy "will be OK."
Since China is one of New Zealand's biggest economic partners, reducing trade tensions between the two biggest economies in the world helps the China-proxy Kiwi.
In the meantime, the third week of the US government shutdown has begun. The Senate will not hold any votes until Tuesday, as Congress is still unable to agree on a funding proposal. In the short run, a protracted US federal shutdown may depress the greenback and provide as a tailwind for the pair.
However, the Reserve Bank of New Zealand's (RBNZ) dovish approach could make the NZD weaker compared to the USD. Last week, the central bank of New Zealand aggressively lowered its benchmark rate by 50 basis points (bps), with the possibility of additional reductions. At the next interest rate decision in November, financial markets are now pricing in a virtually additional 25 basis point decrease to 2.25%.
