The cloud lifts on tariffs
• Tariff threats and trade deals were a key theme in July; tail risk of a global trade war evaporated as countries capitulated to Trump’s demands; more certainty provided on where the US is landing on tariffs
• Risk appetite higher, but closing of short positions in the USD drove broad gains, following its slump in the first half of 2025
• NZD/USD down 3½%, with mainly small net changes on the crosses
Jolly June
• Risk appetite improved in June, interrupted briefly by Middle Eastern conflict, sending global equities to fresh record highs
• Tariffs and US fiscal policy were relegated to the sidelines in terms of market drivers
• USD indices fell for a sixth consecutive month, to fresh three-year lows; NZD/USD rose over 2% to just under 0.61
Currencies consolidate in May
• The de-escalation of the US-China trade war resulted in much calmer market conditions in May, compared to April’s turmoil
• Net major currency movements were modest, even if the USD was broadly weaker again. NZD/USD rose ½%
• Higher risk appetite and more focus on US fiscal policy saw upside pressure on global rates