The NZD/USD pair faced renewed selling pressure on Friday, descending to fresh daily lows amid the release of disappointing Chinese trade figures early in the European session. The spot prices reversed the previous day’s minor gains, currently hovering near the lower end of the weekly range around the 0.5970-0.5975 region.
According to data from the Customs General Administration of China, exports plummeted by a YoY rate of 7.5% in March, significantly below the anticipated 3.0% decline and the 7.1% growth observed in the January-February period. Additionally, imports contracted by 1.9% YoY during the reported month, falling short of the expected 1.2% rise and the 3.5% increase previously recorded. These figures underscored concerns about both global and domestic demand, amplifying worries about the recovery prospects of the world’s second-largest economy. Consequently, this dampened sentiment toward antipodean currencies, including the Kiwi.
Conversely, the US Dollar (USD) saw robust gains, hitting a fresh year-to-date peak amid expectations that the Federal Reserve (Fed) would delay interest rate cuts due to persistent inflationary pressures. Furthermore, ongoing geopolitical tensions bolstered demand for the safe-haven greenback, thereby exerting downward pressure on the NZD/USD pair. With the fundamental backdrop suggesting a bearish bias for spot prices, any attempted recoveries are likely to face selling pressure.
Investors are now awaiting the release of the Preliminary Michigan Consumer Sentiment Index and speeches by influential FOMC members, which are expected to drive demand for the USD during the early North American session and potentially influence the NZD/USD pair. Despite efforts to stabilize, spot prices are poised to register weekly losses, albeit managing to stay above the year-to-date trough near the 0.5940 region recorded last week.
