NZD/USD rebounds around 0.5860 on Monday at the time of writing, up 0.35% on the day, after earlier touching a low near 0.5822 following disappointing economic data from China.
The rebound in the pair comes as the US Dollar (USD) corrects after its recent rally, with the US Dollar Index (DXY) losing 0.14% around 99.15 at the time of press
Data released on Monday by the National Bureau of Statistics (NBS) showed that China’s Retail Sales rose only 0.2% YoY in April, compared with 1.7% previously and well below market expectations of 2%. Meanwhile, Industrial Production increased 4.1% YoY, down from 5.7% previously and below the 5.9% consensus forecast. These figures initially weighed on the New Zealand Dollar (NZD), which is often seen as sensitive to the Chinese economic outlook due to the close trade ties between the two economies.
However, the pullback in the Greenback ultimately allowed NZD/USD to regain ground during the European session. The corrective move in the US Dollar comes after several days of strong gains driven by rising US Treasury yields and expectations of tighter monetary policy from the Federal Reserve (Fed). According to ING, the recent rise in the US 10-year Treasury yield, now at its highest level since early 2025, is increasing pressure on the Fed to adopt a more hawkish tone.