NZD/USD climbs as record US trade surplus boosts Kiwi confidence

• New Zealand posts record goods trade surplus with the US in April, led by a surge in agricultural exports.
• The US Dollar faces headwinds from Moody's credit downgrade, high interest rates, and growing deficit projections.
• Markets await progress on Trump's "One Big Beautiful Bill" in the House as a potential USD catalyst.

The New Zealand Dollar (NZD) continues to strengthen against the US Dollar (USD) on Wednesday, with the release of a record trade surplus in April highlighting the largest monthly goods surplus on record with the United States.

Amid ongoing concerns about the rising costs of US imports and broader fiscal uncertainty, the positive trade figures from New Zealand have reinforced investor confidence in the Kiwi. 

The data underscored the country's export resilience, particularly in agricultural goods, which accounted for approximately 25% of the YoY increase. This robust performance has prompted traders to favor the NZD as an appealing alternative to the Greenback, offering relative stability and return potential in a time of elevated global uncertainty.

Meanwhile, the US Dollar remains weighed down by multiple headwinds: a recent Moody's credit downgrade, elevated interest rates, and mounting fiscal risks tied to President Donald Trump's proposal to extend the 2017 tax cuts under his sweeping "One Big Beautiful Bill." These proposed extensions are projected to widen the US federal deficit by over $3.8 trillion, further amplifying concerns over long-term debt sustainability.

NZD/USD is currently trading near multi-week highs, with technical momentum tilted in favor of further upside. However, near-term direction will likely hinge on developments in Washington, where President Trump is actively pressuring the House of Representatives to approve his bill before the Memorial Day recess. Progress or political roadblocks on this front could influence sentiment around the US Dollar and, in turn, the trajectory of NZD/USD.