The New Zealand dollar fell in Asian trading on Tuesday against a basket of major and minor currencies, resuming losses that had paused the previous day against the US dollar, and hitting its lowest level in six months due to renewed trade tensions between the United States and China — New Zealand’s largest trading partner.

Amid these developments, investors are betting on additional monetary stimulus in New Zealand to support demand and shield the economy from rising global headwinds. As a result, expectations for another rate cut by the Reserve Bank of New Zealand (RBNZ) in November have strengthened considerably.

Price Overview

• NZD/USD: The New Zealand dollar fell by about 0.45% to 0.5704 — its lowest level since April — from the opening level of 0.5726, after reaching an intraday high of 0.5729.

• On Monday, the NZD ended 0.1% higher against the US dollar, snapping a four-day losing streak in what appeared to be a brief corrective pause.

Trade Tensions

US President Donald Trump said on Friday that the United States would raise tariffs on imports to 100% starting November 1 unless China lifts its new export restrictions on key rare-earth materials.

For its part, Beijing defended those restrictions as legitimate measures to protect national interests, though it has so far avoided direct retaliation through counter-tariffs on US goods — signaling a desire to avoid further escalation in the ongoing trade war between the world’s two largest economies.

New Zealand Interest Rates

• The Reserve Bank of New Zealand (RBNZ) last week cut its benchmark interest rate by 50 basis points to a range of 2.50%, the lowest since July 2022, exceeding market expectations for a 25-basis-point cut. This marked the eighth rate reduction since the current monetary-easing cycle began a year ago.

• The RBNZ said its Monetary Policy Committee remains open to further cuts in the official cash rate as needed to ensure inflation stabilizes sustainably near the 2% midpoint target over the medium term.

• Futures pricing currently assigns more than a 95% probability of another 25-basis-point cut at the November 26 meeting.

• Forward-rate markets indicate expectations for the benchmark rate to reach around 2.0% by year-end.

• Investors will closely watch upcoming key New Zealand data on inflation, unemployment, and GDP growth to reassess the outlook for monetary policy.

OPEC+ yesterday approved a fresh increase in production, albeit a limited one of 137,000 barrels per day. And although oil prices rose slightly after the announcement, they still remain in a narrow trading range, with Brent crude hovering just above $65 per barrel.

This development carries a two-edged implication. On one side, it is good news for energy-consuming nations — including the United States. On the other, it is bad news for oil producers — including, paradoxically, the US itself.

The Wall Street Journal reported that Saudi Arabia’s strategy to lead the rollback of production cuts amounts to a “gift to Trump,” because it helps keep gasoline prices down at the pump and mitigates the economic impact of tariffs. Moreover, it cuts into Russian energy export revenues, making it easier for Trump to broker a peace deal in Ukraine, according to the newspaper’s analysis.

In some respects, Saudi Arabia’s shift to increased production is beneficial to the US, particularly in terms of retail fuel pricing. The national average gallon price stood at $3.133 on Sunday (according to AAA), slightly below last year’s $3.176. But that average is a broad indicator — states with higher local taxes, like California, always command higher pump prices regardless of OPEC+ policy.

However, low oil prices also raise anxiety for the US shale industry — a sector that may or may not have been a target in Saudi Arabia’s decision to unwind cuts agreed in 2022. Many media reports suggest OPEC+ is looking to reclaim market share from the US, Guyana, and Brazil.

But the rivalry is not merely about barrels. For instance, US oil exports to China dropped by about 50% last year, even before Trump’s tariff measures intensified. That forced much of US output to redirect toward Europe.

At the same time, Guyana exports oil mainly to Europe, making it a direct competitor to the US — though its output is only about 700,000 barrels per day, far short of competing with Washington or Riyadh. Meanwhile, Brazil has been expanding its oil exports significantly, with a large portion going to China.

Herein lies the real battlefield: China and the broader Asia region, where demand is growing faster than anywhere else. Many analysts expect this growth trajectory to continue long after demand peaks elsewhere. That said, European demand also continues to grow — many European nations still import Russian oil despite announced plans to phase out Moscow’s energy over coming months.

Despite Wall Street Journal’s hypothesis that Saudi Arabia is currying favor with Trump, Riyadh’s behavior since the Biden administration struggled to maintain close ties suggests different priorities — chiefly securing funding for “Vision 2030” projects in the face of persistently low oil prices that, OPEC argues, don’t reflect true demand trends.

As for Trump, he faces a double bind: he needs to placate the US oil sector, which is angered by tariffs and low prices, while also maintaining low fuel prices for consumers. Those goals conflict — he cannot achieve “American energy dominance” if drilling becomes uneconomical due to depressed prices.

Although much of the energy media focuses on the Trump-angle in OPEC+ policy, the Organization is acting with confidence — believing that talk of a global oil demand collapse is exaggerated.

Some OPEC+ members have not yet fully ramped up production to agreed levels, which has helped stabilize prices. Moreover, the return to output increases aims also at regaining lost market share, not purely serving other nations’ energy agendas.

In reality, what benefits a major producer tends to benefit all producers: ideal pricing that neither weakens demand nor overheats markets into collapse. As one analyst put it, OPEC+ has avoided flooding the market with oil as in the past — those days of deliberate oversupply are behind us.

US stocks surged sharply on Monday after President Donald Trump softened his tone regarding trade tensions with China.

Trump said Sunday that the United States was not seeking to harm China, while Treasury Secretary Scott Bessent confirmed that Trump would meet with Chinese President Xi Jinping in South Korea to ease trade tensions.

These remarks eased market fears of a renewed escalation in the trade war after Trump imposed 100% tariffs on Chinese goods and tightened export controls on advanced technology to Beijing, set to take effect in early November.

Still, markets remained uneasy as the US government shutdown entered its 13th day, with the October 15 payroll deadline approaching.

As of 16:59 GMT, the Dow Jones Industrial Average jumped 1.4% (625 points) to 46,104, while the broader S&P 500 rose 1.6% (106 points) to 6,659. The Nasdaq Composite gained 2.1% (470 points) to 22,674.

Bitcoin climbed back above $114,000 on Monday after the cryptocurrency market experienced the largest single-day liquidation in its history, with nearly $19 billion worth of positions wiped out following renewed trade tensions between the United States and China.

The world’s largest digital currency rose 2.6% to $114,360 at 9:23 a.m. Eastern Time (13:23 GMT).

Bitcoin had earlier plunged to as low as $103,893.3 on Friday after briefly surpassing $122,000 the same day, having hit a record high above $126,000 the previous week.

Trump’s new tariff threats trigger massive liquidation wave

The sharp sell-off began after US President Donald Trump announced on Friday plans to impose tariffs of up to 100% on Chinese goods, along with tighter export controls on sensitive technologies.

The announcement caused widespread disruption across global markets, prompting investors to exit high-risk assets and triggering a wave of forced liquidations of highly leveraged positions in the crypto market.

Within just 24 hours, more than $19 billion worth of long positions were liquidated across major exchanges — what data providers described as the largest single-day liquidation event in the history of cryptocurrencies.

Over 1.6 million trading accounts were closed as stop-loss orders and margin calls accelerated, deepening the crash, according to reports.

Exchanges including Binance, Bybit, and Hyperliquid recorded their highest-ever daily liquidation volumes, while other major cryptocurrencies also fell sharply, following Bitcoin’s steep drop.

Beijing vows retaliation as Trump softens tone

China responded to Trump’s tariff threats by declaring it was “not afraid of a trade war” and vowed to take countermeasures if necessary.

However, Trump struck a more conciliatory tone over the weekend, telling markets, “Don’t worry about China,” and indicating there were no immediate plans for further escalation.

This calmer stance helped ease sentiment somewhat, though traders remained wary of sudden shifts in US trade policy.

The sharp volatility seen within a single day after the announcement underscored how closely the crypto market has become tied to macroeconomic and geopolitical developments.

Once considered detached from traditional markets, Bitcoin and other digital assets now behave increasingly like high-risk assets, reacting swiftly to global shocks and cross-market capital flows.

Strategy adds 220 new Bitcoins to its holdings

Strategy — the new name for MicroStrategy — announced that it purchased an additional 220 Bitcoins between October 6 and 12 for about $27.2 million, at an average price of $123,561 per coin, according to a statement released Monday.

This brings the company’s total holdings to 640,250 Bitcoins, valued at roughly $73 billion.

Michael Saylor, the company’s co-founder and executive chairman, said the coins were acquired at an average cost of $74,000 each, bringing total investment to around $47.4 billion including fees and expenses.