Key Moments
- NZD/USD trades near the lower end of its weekly range around 0.5865, marking a second straight session of weakness.
- China’s June Trade Balance came in at $112.5 billion, above the $107.0 billion consensus but below the prior $125.62 billion, offering little support to antipodean currencies.
- Geopolitical tensions and higher oil prices have reinforced expectations for further Fed rate hikes, supporting the US Dollar while investors await the US Nonfarm Payrolls report.
NZD/USD Holds Near Weekly Lows in Asian Trading
The NZD/USD pair maintains a bearish tone for a second consecutive session, trading close to the bottom of its weekly range around the 0.5865 level during Friday’s Asian session. The cross shows limited reaction to the latest Chinese trade figures, as market participants remain focused on upcoming US labor market data.
China Trade Data Fails to Lift the Kiwi
China’s Trade Balance for June, reported in US Dollar terms, showed a surplus of $112.5 billion. This result exceeded expectations of $107.0 billion but remained below the previous reading of $125.62 billion.
Additional details indicated that exports increased 23% year-on-year, compared with a 27% gain in June, while imports rose 27.5% versus a prior 36% increase. Despite the stronger-than-forecast surplus, the numbers did not translate into support for antipodean currencies such as the New Zealand Dollar, as broader risk sentiment and geopolitical concerns dominated trading.
Persistent uncertainty is helping to underpin demand for the US Dollar, acting as a drag on the NZD/USD pair.
Geopolitical Tensions and Oil Price Gains Bolster the Dollar
Geopolitical risks in the Middle East have added another layer of support for the Greenback. 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, heightening fears of a broader regional escalation. This followed a claim by Houthis a day earlier that they were responsible for an attack on a Saudi oil tanker in the Gulf of Aden.
Furthermore, reports indicated that Iran is reviewing a plan that would ban US and Israeli vessels from the Strait of Hormuz. These developments contributed to an overnight increase in oil prices, stoking inflation concerns and reinforcing expectations for further interest rate hikes by the US Federal Reserve.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
