NZD/USD sticks to modest gains above mid-0.5500s after China’s Trade Balance data

NZD/USD stages a modest recovery from a multi-year low touched on Friday.
The uptick lacks any obvious catalyst and runs the risk of fizzling out quickly.
Hawkish Fed expectations continue to underpin the USD and cap spot prices.

Haresh Menghani FXStreet

The NZD/USD pair kicks off the new week on a positive note and for now, seems to have snapped a four-day losing streak to its lowest level since October 2022 touched on Friday. Spot prices stick to modest intraday gains around the 0.5565 area and move little following the release of China's Trade Balance data.

The Customs General Administration of China reported that the trade surplus widened to CNY752.91 billion in December from the previous figure of CNY692.8 billion in the wake of a 10.9% YoY jump in exports. Additional details of the report revealed that the country’s imports rose by 1.3% YoY in the same period vs. 1.2% registered in November. The market reaction, however, turns out to be muted amid concerns about a fragile economy, which, in turn, keeps a lid on any meaningful appreciation for antipodean currencies, including the Kiwi.

The US Dollar (USD), on the other hand, stands tall near its highest level in over two years amid growing acceptance that the Federal Reserve (Fed) will pause its rate-cutting cycle later this month. The expectations were reinforced by Friday's upbeat US Nonfarm Payrolls (NFP) report, which showed that the economy added 256,000 in December compared to 212,000 previous and market expectations for a reading of 160,000. Adding to this, the Unemployment Rate unexpectedly edged lower to 4.1% from 4.2% registered in November.

Meanwhile, hawkish Fed expectations, along with geopolitical risks, temper investors' appetite for riskier assets. This is evident from a generally weaker tone around the equity markets, which further seems to act as a tailwind for the safe-haven buck and contribute to capping the risk-sensitive Kiwi. Adding to this, bets for a more aggressive policy easing by the Reserve Bank of New Zealand (RBNZ) warrant some caution before confirming that the NZD/USD pair has formed a near-term bottom and positioning for additional gains.

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.

AUD/USD regains mild traction, falters near 0.7150

AUD/USD gathers some steam and manages to flirt with the 0.7150 level on Thursday. However, the pair has retraced some of Wednesday’s significant pullback due to renewed selling pressure on the Greenback and a slight improvement in risk sentiment following hopes of a deal in the Middle East. Wrapping up the Australian docket, the RBA’s Hauser will speak early on Friday.

USD/JPY: Japanese Yen coiled at the line, leaning on everyone but Japan

The Yen is doing very little, and that stasis is the whole story. USD/JPY sits glued near 160.00 not because Japan has found new strength, but because two outside forces are fighting to a draw over it: a US rate complex that keeps the dollar bid, and a Ministry of Finance that refuses to let the line break.

Gold puts its 200-day SMA to the test near $4,420

Gold keeps the bullish stance in place in the latter part of Thursday’s session, although a convincing break above the key $4,500 mark per troy ounce still remains elusive. The precious metal’s advance comes amid the resurgence of some selling interest around the Greenback, improving risk sentiment, and declining US Treasury yields across the board.

Bitcoin falls below $64K as demand turns negative, short-term holders' selling intensifies

Bitcoin has fallen below $64,000 on Thursday amid weakening market demand and mounting selling pressure from short-term holders. The leading cryptocurrency slipped toward the $63,000 level amid a broader risk-off environment, with several key metrics signaling one of the most challenging periods of the current market cycle.

Nonfarm payrolls: Testing the limits of Fed policy patience

The upcoming nonfarm payrolls report for May will provide the final update on the US labor market before Kevin Warsh attends his first policy meeting as the new Fed Chair later this month.

Recession on paper: What really moves the Canadian Loonie now?

Statistics Canada handed the headline writers a gift and the analysts a headache. Real GDP shrank 0.1% on an annualized basis in the first quarter, and with the fourth quarter of 2025 revised down to a 1.0% contraction, that is two negative quarters in a row, the textbook definition of a technical recession and Canada's first since the pandemic.