The New Zealand Dollar gains against the USD after softer China inflation data and Fed division over rate cuts.
NZD/USD climbed to 0.5720 in Asian trading, extending a two-day rally as the US Dollar weakened following the Federal Reserve’s June meeting minutes. The Fed remains split on inflation’s trajectory, with some officials favoring rate cuts and others warning of potential hikes due to geopolitical risks.
China’s June CPI rose 1.0% year-over-year, below the 1.1% consensus and May’s 1.2%. Monthly inflation fell 0.3%, worse than the expected 0.2% decline. The data underscores weak domestic demand in New Zealand’s key trading partner, though the NZD held firm.
Geopolitical tensions in the Middle East added to inflation concerns, supporting safe-haven demand for the USD. However, the Fed’s divided stance kept the Greenback under pressure, benefiting the NZD.