FX.co ★ Kiwi Dollar Falls Amid Trade Risks

On Tuesday, the New Zealand dollar weakened to approximately $0.597, reflecting the heightened uncertainty surrounding US-China trade relations, which poses risks to the export-reliant currency. China has once again refuted claims of ongoing trade discussions with the United States, contradicting statements made by President Donald Trump and his team regarding current negotiations. Treasury Secretary Bessent indicated that addressing the trade war falls upon China to "de-escalate" the situation, in contrast to Trump's previous suggestion that the US might initiate a tariff reduction. Domestically, stagnant labor market figures have reinforced market predictions of a 90% probability that the Reserve Bank will reduce interest rates by 25 basis points in the coming month. Additionally, Finance Minister Nicola Willis announced that the baseline expenditure in the 2025 budget will be reduced due to deteriorating economic conditions; nonetheless, the government remains optimistic about achieving stronger growth and lower unemployment rates later this year.