Australian and New Zealand Dollars Surge as US Dollar Falters Amid Tariff Turmoil

Sydney, April 11, 2025 – The Australian and New Zealand dollars are poised to close a turbulent week with significant gains, capitalizing on a weakening U.S. dollar as investor confidence reels from uncertainty surrounding U.S. tariff policies. The unexpected strength of the Aussie and Kiwi currencies marks a sharp departure from their typical vulnerability during periods of market volatility.

The Australian dollar, often a target in times of global stress, defied expectations by climbing to $0.6219 on Friday, up from a five-year low of $0.5910 earlier in the week. This rally translates to a weekly gain of 3.1%, the strongest since late 2022, according to market data. Similarly, the New Zealand dollar rose to $0.5775, rebounding from a five-year trough of $0.5483 to secure a weekly increase of 3.2%, despite a recent cut in local interest rates.

The U.S. dollar’s decline follows President Donald Trump’s decision on Wednesday to scale back tariffs on most countries, except China, in an effort to curb a sell-off in U.S. Treasuries. However, the reprieve failed to stabilize bond markets, with yields on 30-year U.S. bonds on track for their largest weekly surge since 1982. U.S. 10-year yields, which began the week 19 basis points below Australian yields, have now surpassed them by 10 basis points, yet the U.S. dollar continues to lose ground.

Analysts attribute the shift to a broader exodus from U.S. assets, driven by fears of economic disruption from ongoing trade tensions. While the Aussie and Kiwi have outperformed the U.S. dollar, they have struggled against safe-haven currencies like the yen, euro, and Swiss franc, reflecting growing concerns about global growth and demand for resources.

The unexpected resilience of the Australian and New Zealand dollars underscores the complex dynamics at play in global markets. As investors navigate the fallout from U.S. trade policies, the two currencies’ gains highlight a rare moment of strength amid an otherwise darkening economic outlook.