NZD/USD Outlook: Mild Recovery from 0.5900 Support Amid Mixed Sentiment

The New Zealand Dollar (NZD) is attempting a cautious rebound on Friday after Thursday’s sharp drop of nearly 1%, which was driven by a stronger US Dollar following hotter-than-expected US Producer Price Index (PPI) data. The pair found firm support just above the 0.5900 mark and is currently trading near 0.5925, though technical indicators still reflect limited bullish momentum.

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China Data Weakens NZD

Fresh economic data from China, New Zealand’s largest trading partner, added downside pressure on the Kiwi.

• Retail Sales growth slowed to 3.7% YoY in July (vs. 4.6% expected, 4.8% prior).
• Industrial Production rose 5.7% YoY, falling short of both expectations (5.9%) and June’s 6.8% growth.

These results dent optimism for a strong recovery in the Chinese economy, raising concerns for New Zealand’s export outlook, particularly in commodities.

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Impact of US Inflation Data

The USD rally on Thursday was fuelled by US PPI data, which showed the fastest acceleration in producer prices in three years.

• The stronger inflation reading complicates the Federal Reserve’s policy outlook, potentially delaying aggressive rate cuts.
• Market sentiment turned risk-averse following the release, pressuring risk-sensitive currencies like the NZD.

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Technical Picture

• Support: 0.5900 remains the immediate floor, with a break below opening the door toward 0.5870.
• Resistance: Upside barriers are seen at 0.5950 and the key 0.6000 psychological level.
• Indicators: Momentum remains weak, suggesting recovery attempts may be shallow unless risk sentiment improves.

The New Zealand Dollar (NZD) is attempting a cautious rebound on Friday after Thursday’s sharp drop of nearly 1%, which was driven by a stronger US Dollar following hotter-than-expected US Producer Price Index (PPI) data. The pair found firm support just above the 0.5900 mark and is currently trading near 0.5925, though technical indicators still reflect limited bullish momentum.

---

China Data Weakens NZD

Fresh economic data from China, New Zealand’s largest trading partner, added downside pressure on the Kiwi.

• Retail Sales growth slowed to 3.7% YoY in July (vs. 4.6% expected, 4.8% prior).
• Industrial Production rose 5.7% YoY, falling short of both expectations (5.9%) and June’s 6.8% growth.

These results dent optimism for a strong recovery in the Chinese economy, raising concerns for New Zealand’s export outlook, particularly in commodities.

---

Impact of US Inflation Data

The USD rally on Thursday was fuelled by US PPI data, which showed the fastest acceleration in producer prices in three years.

• The stronger inflation reading complicates the Federal Reserve’s policy outlook, potentially delaying aggressive rate cuts.
• Market sentiment turned risk-averse following the release, pressuring risk-sensitive currencies like the NZD.

---

Technical Picture

• Support: 0.5900 remains the immediate floor, with a break below opening the door toward 0.5870.
• Resistance: Upside barriers are seen at 0.5950 and the key 0.6000 psychological level.
• Indicators: Momentum remains weak, suggesting recovery attempts may be shallow unless risk sentiment improves.

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