New Zealand’s Consumer Price Index (CPI) for the second quarter was 2.7%, a bit lower than the expected 2.8%. This number shows how consumer prices and the economy are doing in the country during this time. The AUD/USD pair is steady around 0.6505 during the Asian session. Upcoming decisions from the People’s Bank of China might impact the market. Additionally, ongoing US-China tariff tensions could introduce more volatility into the pair’s trading.

European Central Bank Policy Decision

In Europe, the European Central Bank (ECB) will soon announce its monetary policy amid tensions from ongoing trade disputes, especially with the US. The EUR/USD is still on a downward trend, and traders are ready for possible changes in the next few weeks. China reported a GDP growth of 5.2% year-on-year in the second quarter, supported by strong trade and industrial activity. However, declines in fixed-asset investments and retail sales, plus falling property prices, bring challenges for the future. For those trading EUR/USD, we have compiled a list of reliable brokers in 2025 that provide competitive trading options. This list is designed to help both newcomers and experienced traders find trustworthy partners in the Forex market. The lower-than-expected CPI from New Zealand suggests that the Reserve Bank may consider easing its strict monetary policy sooner than anticipated. For over a year, the central bank has kept its Official Cash Rate at a high of 5.5% to fight inflation. Traders might want to prepare for potential NZD weakness, possibly by selling futures contracts or buying put options on the currency.

Australian Dollar and Market Sensitivity

The stability of the Australian dollar seems temporary due to its sensitivity to Chinese economic actions and trade conflicts. While China’s recent decision to maintain its key lending rates offers short-term support, we are monitoring iron ore prices, which have been unstable and recently dropped below $105 per tonne due to weak demand from China’s property sector. This weakness suggests traders could opt for strategies like a long strangle to benefit from potential volatility in the AUD/USD pair. We anticipate that the euro’s decline will continue, creating opportunities for bearish trades before the ECB’s policy meeting. The ECB started cutting rates in June, but with Eurozone inflation rising to 2.6% in May, officials are cautious about future rate cuts. Therefore, we plan to initiate short-term bearish trades on the EUR/USD, using tight stop-losses to manage risk around the central bank’s announcement. Economic data from China reveals an uneven recovery that could impact global commodities. The strong GDP growth against weakening domestic indicators like retail sales and fixed-asset investment is concerning. Historically, such discrepancies have often led to reduced demand for industrial raw materials, so we advise caution with aggressive long positions in commodities like copper and oil. Create your live VT Markets account and start trading now.

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