On Tuesday, the New Zealand dollar climbed above $0.60, marking its highest point since early November of last year. This surge was largely fueled by uncertainties in the US economy, which have shaken investors' confidence in American assets. Notably, President Trump intensified his criticism of Federal Reserve Chair Jerome Powell on Monday, hinting at the possibility of his removal and cautioning that the US economy might experience a slowdown unless interest rates are promptly reduced.
Domestically, New Zealand's economic performance exhibited strength, with March trade data revealing a 19% year-over-year increase in exports and a 12% rise in imports. This economic activity contributed to a substantial trade surplus of $970 million, the largest since the onset of the pandemic in 2020. In terms of monetary policy, markets are fully anticipating that the Reserve Bank of New Zealand will reduce its cash rate from 3.5% by 25 basis points in May, with expectations of a further drop to 2.75% by the end of the year.
