FX.co ★ NZ Dollar Drops as Greenback Strengthens

On Thursday, the New Zealand dollar depreciated to approximately $0.593, impacted by the strengthening US Dollar after a US trade court invalidated President Donald Trump's tariffs. The Court of International Trade challenged Trump's trade strategy, overturning globally imposed tariffs that were justified under emergency powers, deeming them illegal. On the domestic front, the Reserve Bank of New Zealand (RBNZ) reduced its official cash rate by 25 basis points to 3.25% on Wednesday. This marked the sixth consecutive rate cut, aligning with market expectations, as inflation remains within the target range. The central bank signaled potential for further rate reductions, highlighting the increasing risks to economic growth arising from evolving US trade policies. Yet, market anticipation for an additional rate cut at the upcoming July meeting declined to about 36%, down from a previous 60%. Furthermore, sentiment remained subdued as New Zealand’s business confidence fell to a ten-month low in May, reflecting apprehensions about the economic outlook.