FX.co ★ New Zealand Dollar Retreats

The New Zealand dollar dipped to approximately $0.60 on Tuesday, erasing a 1% gain from the previous session and retreating from its highest point since last November, as the US dollar exhibited renewed strength. Investors remain cautious amidst the ongoing global trade tensions, particularly with escalating China-US friction following Beijing's rejection of Trump's trade violation claim and its pledge to retaliate. This sentiment was further strained by Chinese private data indicating a significant decline in factory activity for May, sparking concerns over Kiwi exports due to China's significant role as a trading partner. On the domestic front, the Reserve Bank of New Zealand recently reduced its official cash rate, although the May adjustment suggests that the easing cycle might be reaching its conclusion after a cumulative reduction of 225 basis points since August. Assistant Governor Karen Silk highlighted that rates currently sit within the neutral range of 2.5% to 3.5%, with any future adjustments contingent upon forthcoming data, as the effects of earlier cuts continue to permeate the economy.