The New Zealand Dollar extends gains despite weak Chinese economic data, driven by a softer US Dollar amid reduced Fed rate hike expectations.
The New Zealand Dollar (NZD) reached 0.5920 against the US Dollar (USD), its highest level since early June, as the USD weakened. The move follows a dovish repricing of Federal Reserve policy after softer US retail sales data for July reduced bets on a September rate hike.
China’s economic slowdown added pressure, with Industrial Production growing 4.5% year-on-year in July, below the 5% forecast, and Retail Sales rising just 0.6%, half the expected 1.5%. The data suggests sluggish growth in the world’s second-largest economy, though authorities downplayed weather-related disruptions.
Analysts note the USD’s decline is the primary driver of the NZD’s strength, as investors pare back Fed tightening expectations. The Kiwi’s resilience highlights its sensitivity to USD moves rather than external growth concerns.