The New Zealand dollar maintained its recent decline, trading around $0.606 on Friday, driven by the overarching strength of the US dollar. This came in the wake of a strong US employment report that dispelled expectations of a Federal Reserve rate cut in July. Additionally, uncertainty surrounding trade weighed on market sentiment as a critical US tariff deadline approached on July 9. On Thursday, President Donald Trump revealed that letters detailing tariff rates on US imports would start being issued from Friday, marking a departure from earlier statements about negotiating individual trade agreements.
On the domestic front, the Reserve Bank of New Zealand is expected to keep its cash rate unchanged at 3.25% in the coming week. However, investors anticipate one or two further 25 basis point cuts later in the year due to concerns over the economic repercussions of US tariffs. Despite recent downward pressure, the Kiwi has risen by 0.2% this week and is poised for its second consecutive weekly gain.
