The New Zealand dollar remained supported above the 0.5900 level on Tuesday, drawing strength from stronger-than-expected GDP figures out of China that helped bolster sentiment across Asia-Pacific markets. The modest uptick in NZD/USD came as traders responded to signs of resilience in the world’s second-largest economy—a key export destination for New Zealand.
China’s economy grew 5.3% year-on-year in the first quarter, exceeding consensus expectations of around 5.0%. The upbeat reading, alongside better-than-forecast retail sales and industrial output data, helped ease recent concerns about the strength of the recovery and gave a lift to currencies sensitive to global growth, including the kiwi.
NZD/USD hovered around 0.5915, building on earlier gains and briefly touching its highest levels in nearly a week. Still, the pair remained within recent ranges, as global markets continue to grapple with broader macro uncertainty, including the outlook for U.S. interest rates and signs of cooling inflation.
“The data out of China is certainly encouraging for risk currencies like NZD,” said a Wellington-based FX strategist. “But the market is still hesitant to fully price in a sustained rally without more clarity on the Fed’s next steps.”
While the Reserve Bank of New Zealand has maintained a hawkish stance relative to peers, with no clear signal of near-term rate cuts, upside for the kiwi remains limited without a broader pickup in risk appetite. A more dovish turn by the U.S. Federal Reserve later this year could shift dynamics in favor of NZD, but that remains speculative for now.
Looking ahead, traders will watch for further economic signals from China and key U.S. data later in the week. For now, the kiwi remains buoyed by stronger regional fundamentals, but momentum will likely hinge on whether global sentiment continues to improve.
