NZD/USD rises beyond 0.5950 on risk appetite, strong China exports

The New Zealand Dollar extends its recovery amid strong exporting data from China.
Easing New Zealand inflation expectations have increased hopes of further RBNZ easing.
The focus today is on the US Jobless Claims for further clues on the health of the US labour market.

Guillermo Alcala FXStreet

The New Zealand Dollar appreciates for the second consecutive day against the US Dollar on Thursday, buoyed by a positive market mood and strong import and export data from China, pointing to the economic recovery of New Zealand’s main trading partner.

Data from China released earlier on Thursday revealed that exports grew beyond expectations favoured by the trade truce with the US. The trade balance shrank, due to a larger-than-expected increase in imports, which suggests that the domestic demand is picking up.

In New Zealand, the RBNZ’s inflation expectations reveal that price pressures are expected to ease in the third quarter of the year, which gives the central bank some leeway to cut interest rates further after their August 20 meeting.

The Kiwi is also drawing support from a weaker US Dollar that remains on its back foot after last week’s payrolls data showed a softening labour market and boosted hopes for Further Fed monetary easing in the coming months.

Investors are now looking at the weekly Jobless claims data, due later today, to assess employment trends better. In that sense, another negative surprise would provide further reasons for the Fed to cut rates in September and might add bearish pressure to the USD.

Economic Indicator

Exports (YoY)

Exports of goods and services, released by National Bureau Statistics of China, consist of transactions in goods and services (sales, barter, gifts or grants) from residents to non-residents.

Economic Indicator

RBNZ Inflation Expectations (QoQ)

The Inflation Expectations released by the Reserve Bank of New Zealand measures business managers´ expectations of annual CPI 2 years from now. An increase in expectations is regarded as inflationary which may anticipate a rise in interest rates. A high reading is positive (or bullish) for the NZD, while a low reading is seen as negative (or bearish).

EUR/USD trims gains, back below 1.1800

EUR/USD now loses some upside momentum, returning to the area below the 1.1800 support as the Greenback manages to regain some composure following the SCOTUS-led pullback earlier in the session.

GBP/USD off highs, recedes to the sub-1.3500 area

Following earlier highs north of 1.3500 the figure, GBP/USD now faces some renewed downside pressure, revisiting the 1.3490 zone as the US Dollar manages to regain some upside impulse in the latter part of the NA session on Friday.

Gold climbs to weekly tops, approaches $5,100/oz

Gold keeps the bid tone well in place at the end of the week, now hitting fresh weekly highs and retargeting the key $5,100 mark per troy ounce. The move higher in the yellow metal comes in response to ongoing geopolitical tensions in the Middle East and modest losses in the US Dollar.