- The NZD/USD has gained strength following the release of important economic data from China.
- China’s GDP for the first quarter grew by 5.4% year-on-year, surpassing the market expectations of 5.1%.
- The US Dollar faces challenges as growing trade tensions between the US and China dampen investor confidence in American assets.
NZD/USD Continues Winning Streak
NZD/USD extends its winning streak for the sixth consecutive day, trading around 0.5910 during the European hours on Wednesday. The pair rises as the New Zealand Dollar (NZD) gains strength following the release of significant economic data from China.
China’s Economic Growth Surpasses Expectations
China’s Gross Domestic Product (GDP) grew at an annual rate of 5.4% in Q1 2025, matching the pace seen in Q4 2024 and exceeding the market’s expectations of 5.1%. On a quarterly basis, GDP rose by 1.2% in Q1, following a 1.6% increase in the previous quarter, which was below the forecasted 1.4% gain.
Strong Retail Sales and Industrial Production in China
China’s Retail Sales surged 5.9% year-over-year, exceeding expectations of 4.2% and marking an increase from February’s 4%. Industrial Production also outperformed expectations, rising by 7.7% compared to the forecast of 5.6% and the 5.9% print in February.
US Dollar Faces Headwinds Amid Trade Tensions
The NZD/USD pair gains as the US Dollar (USD) faces challenges due to declining investor confidence in US assets amidst escalating US-China trade tensions. The Wall Street Journal reported that the Trump administration is using tariff negotiations to encourage US trading partners to reduce their engagements with China.
Trump Administration Investigates Critical Minerals Tariffs
Late Tuesday, Bloomberg reported that US President Donald Trump launched an investigation into potential tariffs on critical minerals, intensifying the ongoing trade war that continues to impact key global economic sectors.
US Retail Sales and Economic Data Awaited
US Retail Sales data for March is scheduled to be released later in the day, providing potential insights into how tariff-related uncertainties are affecting consumer spending. Additionally, Fed Chairman Jerome Powell is set to speak during the late American session. Investors are expected to focus on the first-quarter CPI data, due for release on Thursday, for clues regarding the Reserve Bank of New Zealand’s (RBNZ) monetary policy stance.
