Disappointing Chinese retail sales and industrial output figures weigh on the New Zealand Dollar amid deep trade ties.
The NZD/USD pair fell to 0.5895 in Asian trading Tuesday, pressured by weaker-than-expected Chinese economic data. China’s retail sales grew just 0.6% year-over-year in July, missing the 1.5% forecast and slowing from June’s 1.0% rise. Industrial production also underperformed, rising 4.5% versus expectations of 5.3%, marking its first decline in three months.
New Zealand’s currency, often sensitive to Chinese demand, declined as Beijing’s data signaled broad economic softening. China’s National Bureau of Statistics cited geopolitical tensions and domestic heatwaves as key drags. The Reserve Bank of New Zealand’s upcoming meeting may also limit upside, with markets expecting a pause after July’s rate hike.
The US Dollar’s weakness, driven by lower Fed rate hike bets, provided limited support. Traders now see a near-65% chance the Fed holds rates in September after softer US inflation and retail sales data.