NZD/USD hovers below 0.5750 despite upbeat trade data from China

• NZD/USD remains capped below 0.5750 after pulling back from 0.5780 highs on Tuesday.
• The upbeat Chinese Trade Balance has failed to boost the Kiwi.
• The US Dollar remains firm, with the market forecasting a steady Fed moneary policy.

The New Zealand Dollar is ticking higher on Wednesday but remains trading within Tuesday’s range, with upside attempts capped below 0.5750 and FX volatility subdued. The upbeat Trade Balance data from China, New Zealand’s main trade partner, has failed to provide any significant support to the pair.

Data from the Chinese Customs Authority revealed that the country has managed to dodge the impact of Trump’s tariffs. China's trade surplus increased to $114.1 billion in December, from 111.68 billion in November, beating expectations of a 113.6 billion surplus and reaching a record yearly surplus of $1.2 trillion in 2025.

December's increase has been mostly due to non-US trade, which led to a 6.6% year-on-year rise in exports, from 5.9% in November, against the market consensus of a 3% increment. Apart from that, import growth accelerated to 5.7% from 1.9% in November, suggesting a significant recovery in domestic demand.

In New Zealand, data released on Tuesday showed that Building Permits grew 2.8% in November, following a 0.7% decline in December. The impact of these figures on the Kiwi, however, was marginal.

The NZD remains vulnerable amid a somewhat firmer US Dollar.  The moderate consumer inflation figures seen in the US on Tuesday have failed to change the view that the Federal Reserve (Fed) is unlikely to alter its monetary policy over the next months. Later today, US Retail Sales data and a slew of Fed speakers might provide further guidance for US Dollar crosses.