NZD/USD Holds Above 0.5900 as China’s Trade Surplus Expands

The New Zealand Dollar (NZD) is holding firm against the US Dollar (USD), with NZD/USD trading around 0.5900 during Monday’s Asian session. The pair gained support after China’s August trade data showed a stronger-than-expected surplus, while softer US jobs data kept pressure on the Greenback.

China’s Trade Data Boosts Kiwi

China’s trade surplus widened to CNY 732.7 billion in August, up from CNY 705.18 billion in July. In USD terms, the surplus came in at $102.33 billion, beating expectations of $99.2 billion.

• Exports rose 4.4% YoY, slightly missing forecasts.
• Imports climbed 1.3% YoY, also softer than expected but still showing resilience.

Since New Zealand is heavily reliant on exports to China, stronger Chinese trade data tends to support the Kiwi Dollar.

US Dollar Under Pressure from Weak Jobs Data

The US Dollar remained weak after Friday’s disappointing Nonfarm Payrolls (NFP) report:

• NFP rose only 22,000 in August, far below the 75,000 expected.
• July’s reading was revised up to 79,000, but still reflected weak job growth.
• The Unemployment Rate increased to 4.3%, in line with forecasts.

This has strengthened market bets that the Federal Reserve will deliver a rate cut in September. The CME FedWatch Tool now shows a 92% probability of a 25 bps cut, with some traders even pricing in a possible 50 bps reduction.

Outlook for NZD/USD

• Support: 0.5870 and 0.5840
• Resistance: 0.5920 and 0.5950

As markets await this week’s US inflation and labor market updates, NZD/USD could see further upside if Fed rate cut expectations grow stronger. On the other hand, renewed US-China trade tensions could limit the Kiwi’s advance.

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