- NZD/USD loses ground as investors turn back toward US Dollar.
- The mixed Chinese data failed to improve the Kiwi Dollar.
- Traders await December’s US Retail Sales data to gain fresh impetus on the US economic landscape.
NZD/USD extends its losses on the third consecutive day, trading lower to near 0.6120 during the early European hours on Wednesday. The NZD/USD pair experiences downward pressure, influenced by risk aversion related to the geopolitical conflict in the Middle East. Additionally, there appears to be a slowdown in speculations over Federal Reserve (Fed) interest rate cuts in March, contributing to the downward pressure on the pair.
The New Zealand Dollar (NZD) faces downward pressure despite mixed data from China. China's annual Gross Domestic Product (GDP) grew by 5.2% in the fourth quarter, slightly below the expected 5.3%. December's Industrial Production (YoY) increased by 6.8%, surpassing the expected 6.6%. However, Retail Sales year-over-year came in at 7.4%, falling short of the market consensus of 8.0%.
The fear of weaker demand in China weighed on the Kiwi Dollar (NZD). The decline in Chinese consumer prices for a third consecutive month in December, along with a decrease in producer prices, contributed to concerns about economic conditions and demand in New Zealand's major trading partner, given the close economic ties between the two countries.
The US Dollar Index (DXY) holds steady around 103.50, supported by improved US Treasury yields, where the 2-year and 10-year yields stand at 4.26% and 4.07%, respectively. The risk-off sentiment is boosting demand for the US Dollar (USD), along with some assertive remarks from Federal Reserve (Fed) officials.
Traders are closely monitoring the upcoming US Retail Sales data for December, scheduled for release later in the day. This economic indicator provides insights into consumer spending patterns. Additionally, the release of the Fed's Beige Book and a speech by Fed's John C. Williams will be closely watched for further insights into the central bank's monetary policy stance.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD regains positive traction amid signs of easing US-China trade tensions
AUD/USD attracts some dip-buyers during the Asian session on Wednesday. Hopes for a possible de-escalation in the US-China trade war boost investors' appetite for riskier assets and support the Aussie. Meanwhile, The USD recovers further from a multi-year low, though the weakening confidence in the US economy and the Trump-Powell spat might cap gains.
USD/JPY jumps to one-week high amid likely US-China trade de-escalation
USD/JPY builds on the overnight solid rebound from sub-140.00 levels and jumps to a one-week high during the Asian session on Wednesday. Signs of easing US-China trade tensions lead to a sharp recovery in the risk sentiment and weigh on the safe-haven JPY.
Gold retreats further from record high amid US-China optimism, rebounding USD
Gold price extends the previous day's rejection slide from the $3,500 mark as hopes for US-China trade war de-escalation weigh heavily on safe-haven assets. Trump's remarks that he has no intention of firing Fed Chair Powell allowed the USD to move away from a multi-year low, which prompted some follow-through profit-taking around the precious metal.
Ethereum rallies 10% amid decline in CME short positions
Ethereum saw a 10% gain on Tuesday after the general crypto market rallied alongside Bitcoin. The rally comes after the ETH Chicago Mercantile Exchange basis plunged from 20% in November to about 5% in April.
Five fundamentals for the week: Traders confront the trade war, important surveys, key Fed speech Premium
Will the US strike a trade deal with Japan? That would be positive progress. However, recent developments are not that positive, and there's only one certainty: headlines will dominate markets. Fresh US economic data is also of interest.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.