New Zealand Dollar hangs near weekly low after China's trade data as USD bulls await NFP

• NZD/USD remains depressed for the second straight day as geopolitical risks underpin the USD.
• Recovering oil prices revive inflation fears, bolstering Fed hike bets and also supporting the buck.
• China’s trade data do little to provide any impetus to the Kiwi as the focus remains on the US NFP.

The NZD/USD pair sticks to a negative bias for the second consecutive day and trades near the lower end of its weekly range, around the 0.5865 region, during the Asian session on Friday. Spot prices move little following the release of China's trade data as traders opt to wait for the crucial US monthly employment details.

In fact, China's Trade Balance for June, in US Dollar (USD) terms, showed a surplus of $112.5 billion, higher than the $107.0 billion expected, but lower than the prior release of $125.62 billion. Additional details revealed that exports rose 23% YoY, compared to a 27% increase seen in June, while imports climbed 27.5% vs. 36% recorded previously. The data fails to provide any impetus to antipodean currencies, including the New Zealand Dollar (NZD), as geopolitical uncertainties continue to underpin the safe-haven US Dollar (USD) and weigh on the NZD/USD pair.

In fact, a Saudi official said that some Iraqi militia factions, in coordination with Yemen's Iran-backed Houthis, are planning to attack the kingdom in the very near future, raising the risk of a wider regional conflict. This comes a day after Houthis claimed responsibility for an attack on a Saudi oil tanker in the Gulf of Aden. Furthermore, reports suggest that Iran is reviewing a plan ‌that would ban US and Israeli vessels from the Strait of Hormuz. This led to the overnight rise in oil prices, fueling inflation fears and bolstering US Federal Reserve (Fed) rate hike bets.

Hawkish Fed expectations, in turn, remain supportive of elevated US Treasury bond yields and turn out to be another factor supporting the Greenback. USD bulls, however, seem hesitant to place aggressive bets and look to the crucial US Nonfarm Payrolls (NFP) report for more cues about the Fed's future policy path. In the meantime, the Reserve Bank of New Zealand's (RBNZ) hawkish tilt could support the Kiwi and help limit the downside for the NZD/USD pair, warranting some caution before positioning for any further intraday depreciating move.

NZD/USD daily chart

Technical Analysis

The NZD/USD pair holds above the 100-day Simple Moving Average (SMA) at 0.5823, suggesting that the underlying demand is still in place despite recent consolidation around the 0.5860 area. A daily close below this level, however, would hint at fading upside momentum and expose deeper retracements toward the mid-0.5700s, while holding above it keeps the door open for a continuation of the advance toward the 0.5900 handle over the coming sessions.

(The technical analysis of this story was written with the help of an AI tool. Know more.)