The New Zealand Dollar is close to 0.5800 against the USD, thanks to a strong trade balance from China. The difference in monetary policy between the Reserve Bank of New Zealand (RBNZ) and the Federal Reserve has helped the NZD rise over 3% in December. Chinese export numbers are increasing risk appetite across Asia, which is lifting the New Zealand Dollar. It hit a six-week high at 0.5790 before adjusting to 0.5780. In November, China’s trade surplus jumped to USD 111.68 billion, up from USD 90.07 billion in October, exceeding the expected surplus of USD 100.20 billion. This surge came with a 5.9% year-on-year increase in exports.

The Impact On US Dollar

The strong trade surplus is putting pressure on the US Dollar as the market looks ahead to the Federal Reserve’s upcoming meeting. There is a 90% chance that the Fed will cut rates by a quarter-point, with more cuts likely in 2026. In contrast, the RBNZ lowered rates by 25 basis points in November, signaling an end to its easing cycle. This, alongside robust Chinese data, has helped the Kiwi gain over 3% against the US Dollar in December. A high Chinese Trade Balance is seen as positive for the CNY and affects global Forex markets due to its significance for the global economy. The last numbers were released on December 8, 2025. The New Zealand Dollar is climbing thanks to unexpectedly strong Chinese trade figures, moving closer to the 0.5800 mark against the US Dollar. This positive sentiment is boosted by the widening gap between the RBNZ’s stable approach and the Federal Reserve’s expected rate cut. Upcoming Fed decisions this Wednesday are set to be crucial for the NZD/USD pair in the next few days.

Fed Meeting’s Significance

Traders are anticipating a high chance of a rate cut, with CME Group’s tools showing nearly a 90% probability of the Fed easing its policies this week. Historically, when the Fed starts an easing cycle after tightening—like in 2024—it has often indicated the beginning of a longer-term decline for the dollar. This suggests the current momentum could extend into 2026. Meanwhile, the RBNZ seems firm in its approach, especially since domestic inflation is still a challenge. In the third quarter of 2025, annual inflation was at 4.5%, leaving the central bank little reason to consider rate cuts. This ongoing policy difference is making the Kiwi more attractive. With the upcoming Fed meeting, taking a direct long position poses significant event risks if there are surprises. A safer strategy might be to use call options to bet on further strength of the Kiwi, possibly targeting prices above the 0.5800 resistance level. This way, we can capture potential gains while clearly defining our maximum risk to the premium paid for the option. While today’s Chinese export data is impressive, it’s important to remember that recovery remains uneven. For instance, the November 2025 Caixin Manufacturing PMI was reported at 50.7, indicating only slight growth. This serves as a reminder that the Chinese economy still faces challenges. Any future weakness in China could quickly dampen the Kiwi’s momentum. Create your live VT Markets account and start trading now.

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