NZD/USD climbs near 0.5950 after China surplus, RBNZ inflation outlook

NZD/USD appreciates as China's Trade Surplus widened in July.
RBNZ’s average one-year Inflation Expectations fell to 2.37% in Q3, while two-year inflation expectations eased to 2.28%.
Fed’s Daly stated that the central bank still has work to do in its battle against inflationary pressures.

Akhtar Faruqui FXStreet

NZD/USD extends its gains for the second successive session, trading around 0.5950 during the Asian hours on Thursday. The pair appreciates following the release of China’s trade balance and the Reserve Bank of New Zealand’s (RBNZ) Inflation Expectations data. Traders’ focus is shifted toward the US weekly Initial Jobless Claims due later in the North American session.

China's Trade Surplus increased to CNY705.10 billion in July, from the previous figure of CNY585.96 billion. Exports climbed 8.0% YoY in July after a 7.2% increase in June, while imports rose 4.8% YoY against 2.3% prior. In US Dollar (USD) terms, China’s Trade Balance arrived at 98.24 billion, falling short of the 105.0 billion expected increase and the 114.77 billion recorded previously.

RBNZ’s Inflation Expectations declined on a 12-month and a two-year time frame for the third quarter of 2025. NZ average one-year Inflation Expectations declined to 2.37% in Q3, against 2.41% in the second quarter. Meanwhile, two-year inflation expectations eased to 2.28% in Q3 from 2.29% seen in Q2.

Market sentiment remains cautious as the weaker-than-expected labor market report boosts expectations that the US Federal Reserve (Fed) will deliver a 25 basis point rate cut in September. San Francisco Fed President Mary Daly noted on Wednesday that the Fed still has some ground to cover on its fight with inflation pressures despite overall progress. Daly highlighted that the Fed may be forced to act soon without having the full picture.

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.

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