The NZD/USD pair continues its decline, hovering near 0.5600 in early European trading on Friday. The New Zealand Dollar (NZD) faces persistent downward pressure despite a marginal increase in consumer confidence for February, as global trade tensions and domestic monetary concerns weigh on sentiment.
The ANZ–Roy Morgan Consumer Confidence Index increased to 96.6 from January’s 96.0. However, the economic outlook for the next 12 months worsened to -16%, while house price inflation expectations slightly improved.
Trade-related uncertainty remains a major driver for NZD weakness. US President Donald Trump reaffirmed that a 25% tariff on Canadian and Mexican goods will take effect on March 4. Additionally, Trump imposed further tariffs on Chinese imports, increasing levies introduced on February 4 from 10% to 20%, citing concerns over drug trafficking and the fentanyl crisis. Given New Zealand’s economic ties to China, escalating trade tensions between the US and China could continue to pressure the Kiwi.
Market participants now focus on the US Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation gauge, for further direction.
Trade Idea:
Short NZD/USD below 0.5600, targeting 0.5550, with a stop-loss at 0.5630. A break above 0.5625 could signal a corrective rebound toward 0.5660.