NZD/USD breaks below 0.5900, remains subdued following China’s trade data

NZD/USD holds losses after China released its latest trade data, indicating a slowdown in external demand.
China's trade surplus shrank to CNY 689.99 billion in April, down from CNY 736.72 billion in March.
US Initial Jobless Claims dropped to 228,000 for the week ending May 3, slightly beating expectations.

Akhtar Faruqui FXStreet

The NZD/USD pair continues its downward trajectory for the third consecutive session, hovering near 0.5890 during Friday's Asian trading hours. The decline follows the release of China's latest trade data, which pointed to a slowdown in external demand. Given New Zealand’s strong trade links with China, any weakness in the Chinese economy tends to negatively impact the NZD.

China’s trade surplus narrowed to CNY 689.99 billion in April, down from CNY 736.72 billion in March. Exports rose 9.3% year-on-year, easing from March's 13.5% growth, while imports edged up 0.8% YoY, recovering from a -3.5% decline previously.

In US Dollar (USD) terms, the trade surplus stood at $96.18 billion—higher than the $89 billion forecast but below March’s $102.63 billion. Export growth slowed to 8.1% YoY from 12.4%, though it beat expectations of 1.9%. Imports declined slightly by 0.2% YoY, better than the expected -5.9% and the previous -4.3%. China’s trade surplus with the US shrank to $20.46 billion in April from $27.6 billion in March.

Adding to the NZD’s woes, the US Dollar is gaining support from upbeat labor market data. US Initial Jobless Claims fell to 228,000 for the week ending May 3, slightly better than forecasts and down from the prior week's 241,000. The insured unemployment rate held steady at 1.2%, while the four-week moving average inched up to 226,000. Continuing Jobless Claims declined by 29,000 to 1.879 million for the week ending April 26, reflecting ongoing labor market strength.

Economic Indicator

Trade Balance CNY

The Trade Balance released by the General Administration of Customs of the People’s Republic of China is a balance between exports and imports of total goods and services. A positive value shows trade surplus, while a negative value shows trade deficit. It is an event that generates some volatility for the CNY. As the Chinese economy has influence on the global economy, this economic indicator would have an impact on the Forex market. In general, a high reading is seen as positive (or bullish) CNY, while a low reading is seen as negative (or bearish) for the CNY.

GBP/USD flirts with tops near 1.3470

GBP/USD manages to regain composure and challenge the area of daily highs around 1.3470 on Friday. Cable picks up pace despite marginal gains in the Greenback in a context of swelling geopolitical tensions and rising global oil prices.

Gold remains below $4,100 despite receding Fed hike bets, weak USD

Gold opens with a bullish gap at the start of a new week amid receding Fed rate-hike expectations and a bearish US Dollar. Oil prices tumbled after Trump canceled an attack on Iran and said that a deal is near, easing inflation fears. This forces traders to dial back bets on extreme Fed tightening and drags the USD to a fresh low since June 17, which, in turn, is supporting the non-yielding bullion. However, the recent repeated failures to find acceptance above $4,100 warrant caution for XAU/USD bulls.

Gold: The $4,000 mark holds the downside for now

Gold faces renewed selling pressure, falling sharply toweard the $4,000 mark per troy ounce as the US Dollar regains momentum. Escalating US-Iran tensions are keeping inflation concerns and expectations of further Fed rate hikes alive, weighing further on the yellow metal.

Week ahead: US payrolls report and AI earnings to keep investors on edge

After the Fed decision, NFP report awaited for more rate hike clues. Employment also on the agenda in Canada and New Zealand. Chinese trade and Japanese wage data to be watched too. But Iran and AI headlines to remain in driver’s seat for risk sentiment.

Middle East War updates: Trump holds off Iran strikes on pledge Hormuz deal is close

Here’s a brief recap of the key developments in the Middle East war that occurred over the weekend, which are expected to have a significant impact on markets in the upcoming week. Risk sentiment improves on Monday, undermining demand for the US Dollar Index and drag crude oil prices lower.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.