The NZD/USD remains limited below 0.6000 before the escalation of commercial tensions between the US and China

  • The NZD/USD is weaker around 0.5995 during the Asian session on Tuesday.
  • China warned the nations against appealing the US in commercial agreements.
  • Trump said the US economy could slow down unless interest rates immediately fall.

The NZD/USD is softened to about 0.5995 during the Asian negotiation hours on Tuesday. The New Zealand dollar (NZD) yields to the US dollar amid the growing tension of the commercial war between the US and China. However, the fall of the torque could be limited since the operators are concerned with the independence of the Federal Reserve (FED) under the Trump administration.

China warned that it will respond to nations that make agreements with the US that harm Beijing’s interests, since the commercial war between the US and China threatens to drag other nations. “China firmly opposes that any party reaches an agreement at the expense of China’s interests. If this happens, China will never accept it and take retaliation measures in a resolved way,” said a spokesman for the Chinese Ministry of Commerce.

The comments occurred after reports that the US plans to press governments to restrict trade with China in exchange for exemptions to US tariffs. The growing commercial tensions between the two largest economies in the world weigh on the Kiwi, which acts as Proxy in China, since China is the largest commercial partner in New Zealand.

Despite the increase in inflation, monetary markets have completely incorporated a raised rise at the May meeting. The RBNZ cut the rates in a quarter quarter earlier this month, reducing its official cash (OCR) rate to 3.5%, the lowest level since October 2022. The New Zealand Central Bank is expected to maintain an aggressive posture and continue to cut fees to boost the New Zealand economy. This, in turn, could contribute to the fall of the NZD.

However, concerns about the independence of the Fed could drag the dollar down and limit the fall of the torque. The president of the United States Donald Trump repeated his criticism of Powell of the Fed, saying that the US economy could be slowed unless interest rates are immediately reduced.

Commercial War between the US and China Faqs


In general terms, “Trade War” is a commercial war, an economic conflict between two or more countries due to the extreme protectionism of one of the parties. It implies the creation of commercial barriers, such as tariffs, which are in counterbarreras, increasing import costs and, therefore, the cost of life.


An economic conflict between the United States (USA) and China began in early 2018, when President Donald Trump established commercial barriers against China, claiming unfair commercial practices and theft of intellectual property by the Asian giant. China took retaliation measures, imposing tariffs on multiple American products, such as cars and soybeans. The tensions climbed until the two countries signed the Phase one trade agreement between the US and China in January 2020. The agreement required structural reforms and other changes in China’s economic and commercial regime and intended to restore stability and confidence between the two nations. Coronavirus pandemia diverted the attention of the conflict. However, it is worth mentioning that President Joe Biden, who took office after Trump, kept the tariffs and even added some additional encumbrances.


Donald Trump’s return to the White House as the 47th US president has unleashed a new wave of tensions between the two countries. During the 2024 election campaign, Trump promised to impose 60% tariff particularly in investment, and directly feeding the inflation of the consumer price index.

Source: Fx Street

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