NZD/USD edges higher on upbeat Chinese trade data, limited by strong US Dollar

NZD/USD trades higher on Wednesday, hovering around 0.5750 at the time of writing, up 0.25% on the day. The New Zealand Dollar (NZD) draws support from improved risk sentiment following upbeat macroeconomic data from China, New Zealand’s key trading partner, although a relatively firm US Dollar (USD) limits the extent of the advance.

Data released by the Chinese Customs Authority shows that the Chinese economy has so far managed to avoid the full impact of tariffs imposed by US President Donald Trump. China’s trade surplus rose to $114.1 billion in December from $111.68 billion in November, beating market expectations of a $113.6 billion surplus. On a full-year basis, the trade surplus reached a record $1.2 trillion in 2025. The improvement was largely driven by non-US trade, with exports rising 6.6% YoY in December, up from 5.9% in November and well above the market consensus of a 3% increase. Imports also picked up sharply, growing 5.7% YoY compared with 1.9% in the previous month, pointing to a notable recovery in domestic demand. These figures underpin growth-sensitive currencies, including the New Zealand Dollar.

In New Zealand, domestic data had a more limited impact. Building Permits rose 2.8% in November after a 0.7% decline in the previous month, suggesting a gradual stabilization in the housing sector. However, the release failed to significantly alter market perceptions of the Kiwi, with investors remaining focused on external drivers.

The upside in NZD/USD remains constrained by the relative strength of the US Dollar. In the United States (US), macroeconomic data released earlier on Wednesday lend support to the Greenback. The US Bureau of Labor Statistics reported that November’s Producer Price Index (PPI) rose 3% YoY, up from 2.8% in October and above expectations of 2.7%. Core PPI inflation also came in at 3%, increasing from 2.9% previously and exceeding market forecasts. Meanwhile, Retail Sales rose 0.6% MoM in November, following a 0.1% contraction in October and beating the 0.4% consensus, helped by a rebound in motor vehicle sales and household spending.

Comments from Federal Reserve (Fed) officials continue to reflect a cautious stance on monetary easing. Minneapolis Fed President Neel Kashkari said that a rate cut is still on the table but stressed that it is too soon to act. Chicago Fed President Austan Goolsbee highlighted the importance of central bank independence for maintaining low inflation, while Anna Paulson of the Fed of Philadelphia noted that modest rate cuts could be appropriate later this year if economic forecasts are met. Against this backdrop, NZD/USD finds support from positive signals out of China but remains exposed to headwinds from the persistently firm US Dollar.