NZD/USD surges toward 0.6000 amid resilient Retail Sales figures and USD weakness

• New Zealand Dollar surges as Retail Sales and US Dollar weakness drive gains.
• Trump's 50% tariff threat on EU imports adds to diminishing growth prospects for the US economy, fueling USD outflows.
• NZD/USD rises toward 0.6000 with markets looking ahead to Fed Powell's speech scheduled for Sunday.

The New Zealand Dollar (NZD) has strengthened against the US Dollar (USD) on Friday, buoyed by positive Retail Sales data and a weaker Greenback.

At the time of writing, NZD/USD is heading toward 0.6000, with intraday gains of 1.50% resulting in a clear break of the 20-day Simple Moving Average (SMA) that provides support at 0.5928.

Thursday's release of New Zealand's first quarter Retail Sales, rising by 0.8% in Q1, came above analyst estimates of a 0.1% increase. The upside surprise reflected stable consumer spending growth, providing a positive shift in NZD sentiment. Additionally, the New Zealand Treasury released its updated budget forecasts that showed expectations for the deficit for the 2025/2026 fiscal year to rise by 1.3%, below prior forecasts of 1.9%.

For the United States, US President Donald Trump's proposal for a 50% tariff charge on imports of goods from the European Union (EU) resulted in an increase in USD outflows, fueling US Dollar weakness.

As speakers of the Federal Reserve (Fed) maintained a hawkish stance, raising expectations that the Fed will maintain interest rates at the current 4.25%-4.50% range at the upcoming June and July meetings, the economic outlook for the US remains uncertain. While the Fed is expected to cut rates in September, Fed Chair Jerome Powell will provide his remarks on Sunday, providing potential insight into rate expectations amid the current economic backdrop.