After rising for two consecutive days, the NZD/USD pair has halted its winning streak and is currently trading around 0.5960 during the early European hours on Friday. However, there is a chance for the pair to regain its strength as the US Dollar (USD) might face difficulties due to a court ruling allowing President Donald Trump’s tariffs to be implemented.
On Wednesday, a three-judge panel at the Court of International Trade in Manhattan stated that Trump’s use of the International Emergency Economic Powers Act (IEEPA) from the Carter-era to justify his international agenda was unjustified. The court declared that Trump exceeded his authority in imposing wide-ranging import tariffs and deemed the executive orders issued on April 2 to be unlawful.
Accordingly, the Trump administration is considering implementing an existing law that permits tariffs of up to 15% for a period of 150 days. According to a report by the Wall Street Journal (WSJ), a final decision has not been made, and the administration may delay implementing any plans.
On the US data front, the preliminary Gross Domestic Product Annualized for Q1 showed a decline of 0.2%, which was not as bad as the expected decrease of 0.3%. The Personal Consumption Expenditures (PCE) remained consistent with a 3.6% increase quarter-over-quarter in Q1, as expected. Meanwhile, the Core PCE rose 3.4% QoQ compared to the expected 3.5% increase. The US April Personal Consumption Expenditures (PCE) Price Index report is expected to be released on Friday.
On the New Zealand side, the ANZ–Roy Morgan Consumer Confidence dropped to 92.9 in May from 98.3 in April, reflecting weakened consumer sentiment. High inflation expectations continue to impact households’ sentiment. Additionally, the seasonally adjusted Building Permits fell by 15.6% month-on-month in April, compared to the previous month’s increase of 10.7% (revised from 9.6%) in March.