NZD/USD Update Amid China’s Economic Data

In the Asian trading session on Wednesday, the NZD/USD pair is showing some strength, hovering around 0.5825. This rise appears to be in response to China’s recent economic indicators, which are influencing the New Zealand dollar’s performance against the US dollar. Investors are eagerly awaiting the U.S. Producer Price Index (PPI) report for June, set to be released later in the day.

Data from China’s National Bureau of Statistics (NBS) shows that the economy grew by 4.3% year-on-year in the second quarter, a drop from 5.0% in the previous quarter and below the expected 4.5%. This marks the slowest growth rate since 2022 and is also beneath China’s target growth range of 4.5% to 5.0% for the year.

On a quarterly basis, China’s GDP rose by 0.9% in Q2, following a 1.3% increase in Q1, which aligns with market expectations.

Retail sales for June showed a year-on-year increase of 1.0%, outperforming forecasts of a decline. Additionally, industrial production saw a rise of 5.3%, surpassing the 4.5% recorded in May and expectations of 4.6%. This mixed economic data from China hasn’t substantially affected the Kiwi, New Zealand’s currency.

Turning to the dollar, disappointing U.S. inflation figures have caused traders to reassess the likelihood of a Federal Reserve interest rate hike in July, leading to a dip in the dollar’s value. The odds for a rate increase this month have decreased to 16%, down from 42% earlier in the week. Meanwhile, the projections for a rate hike later this year now stand at 80%, a decrease from 89% on Monday.