FX.co ★ New Zealand Dollar Edges Up Amid Trade Optimism

The New Zealand dollar edged higher, approaching $0.602 on Monday, after two days of declines. This shift occurred as investors evaluated a potential extension of the US-China tariff pause and a newly forged trade agreement between the US and the EU. Scheduled meetings in Stockholm between US and Chinese negotiators aim to extend a truce that prevents significant tariff increases, with an approaching deadline of August 12. Successful negotiations may bolster the Kiwi, considering New Zealand’s substantial trade relations with China, its largest export market. Simultaneously, the US and EU reached a preliminary trade accord over the weekend, implementing a 15% tariff on most EU goods, which is half of the previously threatened rate. Domestically, the market anticipates a 75% probability that the Reserve Bank of New Zealand will reduce its cash rate from 3.25% to 3.0% at its upcoming August meeting, although there is a growing sentiment that the easing cycle is drawing to a close.