New Zealand Dollar Dips Below 0.5800 Amid Renewed USD Demand and Tariff Threats

The NZD/USD pair loses ground to around 0.5790 during the early Asian session on Tuesday, pressured by renewed US Dollar (USD) demand. Nonetheless, the potential downside for the pair might be limited amid the fresh US President Donald Trump trade war. The US ADP weekly report will be released later on Tuesday. On Saturday, Trump said that he would impose an additional 10% import tariff from February 1 on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and the United Kingdom (UK) until the United States (US) is allowed to buy Greenland. The threat by Trump to impose fresh tariffs on eight European countries could boost the "Sell America" narrative and create a tailwind for the pair. Data released by the National Bureau of Statistics on Monday showed that the Chinese economy hit the official target of around 5%, the same growth as in 2024, despite a slowdown to 4.5% in the fourth quarter (Q4) of the year. The quarterly Gross Domestic Product (GDP) eased from 4.8% growth in Q3 and was the weakest quarterly figure since early 2023. The positive Chinese economic data could provide some support to the China-proxy Kiwi, as China is a major trading partner to New Zealand. On Tuesday, the People’s Bank of China (PBOC), China's central bank, announced to leave its Loan Prime Rates (LPRs) unchanged. The one-year and five-year LPRs were at 3.00% and 3.50%, respectively.