NZD/USD rises to near 0.5980 as US Dollar corrects after Trump’s SOTU speech

The NZD/USD pair trades 0.16% higher to near 0.5980 during the Asian trading session on Wednesday. The Kiwi pair gains as the US Dollar (USD) faces selling pressure after United States (US) President Donald Trump delivered his first State of the Union (SOTU) address of his second administration before a joint session of Congress.

At the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, is down 0.15% to near 97.75.

In his speech, US President Trump praised his economic achievements and called “tariffs” one of the key reasons behind the economic turnaround. Trump also criticized the US Supreme Court (SC) for ruling against his tariff policy, calling it “unfortunate” and saying that “over time, tariffs paid by foreign countries will substantially replace the system of income tax”.

Broadly, the US Dollar remains firm on the expectation that the Federal Reserve (Fed) will hold interest rates steady in the March and April policy meetings. On Monday, Fed Governor Christopher Waller, who remained an outspoken dove in the past few months, stated that he could support leaving interest rates unchanged in the March policy meeting, citing the surprise uptick in the employment data.

Meanwhile, the New Zealand Dollar (NZD) trades broadly calm in a light economic calendar week. On the monetary policy front, there seems to be less urgency for interest rate hikes as Reserve Bank of New Zealand (RBNZ) Governor Anna Breman said in the monetary policy announcement this month that growth should pick up this year amid improving economic conditions, without reigniting strong inflationary pressures.