FX.co ★ New Zealand Dollar Edges Lower

The New Zealand dollar fell to approximately $0.602 on Friday, reversing a two-day upward trend due to deteriorating risk sentiment following renewed tariff threats from US President Donald Trump. On Thursday, Trump announced plans for the US to impose comprehensive tariffs of 15% or 20% on most of its trade partners, presenting new challenges for New Zealand, which previously faced only a 10% tariff. On the monetary policy front, the Reserve Bank of New Zealand maintained its official cash rate at 3.25% this week, as anticipated, yet signaled a potential rate cut in August if economic conditions unfold as expected. Current market predictions reflect a 65% probability of a 25 basis point cut next month, with nearly equal chances of a further decrease to 2.75%. The New Zealand dollar has declined by 0.6% this week, threatened to end a two-week stretch of gains. In economic developments, New Zealand's manufacturing activity experienced an increase in June but remained in contraction, as businesses continued to grapple with sluggish demand, high living costs, and economic uncertainty.