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NZD/USD steadies above 0.5850 after China inflation data
Chinese CPI and PPI came in firmer than expectations, while traders look ahead to US PPI Thursday and CPI Friday for more clues on Fed policy.
NZD/USD firmed in early Asian trading on Wednesday, holding gains around 0.5855 as the New Zealand dollar edged higher versus the US dollar following China’s latest inflation data, according to FXStreet.
China’s consumer price index rose 0.8% year over year in August, matching market expectations but up from 0.5% in the prior month. On a monthly basis, CPI increased 0.4% after a 0.1% decline in July, while China’s producer price index climbed 3.8% year over year versus 3.5% in July, beating expectations for 3.7%.
The upside inflation mix is expected to support the China-linked New Zealand dollar, as China is a major trading partner for New Zealand. Traders are also watching upcoming US releases for guidance on the monetary policy outlook.
FXStreet said markets are focused on US PPI data due Thursday and CPI readings due Friday, amid ongoing debate over whether the Federal Reserve will hike rates at its September meeting. The piece added that NZD/USD is consolidating just above the 100-day simple moving average, suggesting nearby support, while the RSI at 45.6 points to cooled bullish momentum and a neutral, range-bound near-term bias.