The NZD/USD has experienced selling pressure, dropping to approximately 0.5620 in early Asian trading. This movement coincided with US tariff announcements from President Trump, including a 25% tariff on goods from Mexico and Canada, and an additional 10% on Chinese imports.

Concerns over these tariffs have negatively impacted the New Zealand Dollar, as China is a primary trading partner. The US economy’s GDP grew at a 2.3% annual rate in Q4, aligning with market expectations and causing the Greenback to strengthen.

Dairy prices and economic data from New Zealand play important roles in influencing the NZD’s value. Additionally, broader market sentiment can impact the currency’s performance, with risk-on periods tending to favour the Kiwi.

This morning’s dip in the NZD/USD exchange rate to around 0.5620 comes at a time when fresh US tariffs are causing uncertainty across financial markets. With Washington imposing a 25% levy on imports from Mexico and Canada, alongside an extra 10% duty on Chinese goods, we’re seeing traders reassess risk exposure. This announcement also means investors are weighing the broader impact such policies may have on global trade flows and economic growth.

For traders watching the Kiwi, it’s clear the connection to China can’t be ignored. Beijing takes in a large share of New Zealand’s exports, so any disruption to Chinese trade could have knock-on effects on demand. With this in mind, the recent strength of the Greenback is also reshaping trading dynamics. The latest US GDP data shows a 2.3% annualised growth rate for Q4, which came in line with forecasts, giving the dollar further momentum.

Market participants should keep an eye on upcoming economic indicators out of New Zealand. Dairy prices, in particular, tend to play a major role in shaping expectations for the Kiwi, given the commodity’s place in the country’s exports. Broader risk sentiment is another factor we need to account for in the weeks ahead—historically, when investors show appetite for risk, NZD has benefited. However, ongoing trade uncertainties and a stronger US dollar could make it more difficult for the currency to gain ground in the near term.

With volatility in focus, traders should remain alert to any shifts in global growth expectations and policy developments. Inflation data and central bank rhetoric will add further layers to the market’s response, requiring a measured approach when considering positioning.