- NZD/USD gains ground to near 0.5880 in Friday’s Asian session.
- New Zealand recorded a monthly trade deficit of NZ$257 million in February, narrower than expected.
- Fed kept interest rates steady in the 3.5%–3.75% range on Wednesday; officials signal one projected rate cut in 2026.
The NZD/USD pair gathers strength to around 0.5880 during the Asian trading hours on Friday. The New Zealand Dollar (NZD) edges higher against the US Dollar (USD) on a narrower-than-expected New Zealand trade deficit. Traders will closely watch the ongoing conflict in the Middle East, which could impact the currency pair.
Data released by Statistics New Zealand on Friday showed that New Zealand recorded a monthly trade deficit of NZ$257 million in February, compared to a NZ$627 million trade deficit in January. This figure was narrower than market expectations of a NZ$470 million shortfall. The Kiwi strengthens against the USD following the upbeat economic data.
However, weaker New Zealand’s Gross Domestic Product (GDP) might cap the upside for the pair. New Zealand’s economy grew by 0.2% QoQ in the fourth quarter (Q4), compared with a 0.9% expansion (revised from 1.1%) in Q3. This reading came in weaker than the expectation of 0.4%. The fourth-quarter GDP expanded by 1.3% YoY, compared with a rise of 1.1% (revised from 1.3%) in Q3, while falling short of the 1.7% growth forecast.
The US Federal Reserve (Fed) on Wednesday decided to maintain its target range for the federal funds rate at 3.50-3.75%, as widely expected. Fed policymakers signaled a quarter of a percentage point rate cut by the end of this year, a view that on the surface was unchanged from their last set of projections in December.
