NZD/USD is moving up at the beginning of the week due to fresh selling of the USD. The Reserve Bank of New Zealand’s strong stance supports the NZD/USD, even though positive data from China hasn’t boosted other countries’ currencies. The NZD/USD pair is trading at about 0.5770, a four-day high. It reacts slightly to Chinese economic figures, remaining within last week’s range. China’s economy grew by 1.2% in the fourth quarter of 2025, which is better than the expected 1.0% and last quarter’s 1.1%.

Mixed Chinese Economic Data

In December, retail sales in China increased by 0.9%, falling short of the expected 1.2% and lower than November’s 1.3%. Meanwhile, industrial production rose to 5.2%, surpassing the forecast of 5.0% and November’s 4.8%. Fixed asset investment, however, saw a decline of 3.8% year-on-year. Even with these figures, the NZD is struggling to gain momentum due to global risk aversion impacting risk-sensitive currencies like the New Zealand Dollar. A weak US Dollar does provide some support for NZD/USD, along with the positive outlook from the Reserve Bank of New Zealand. This week, the NZD/USD pair is influenced by two opposing factors. The Reserve Bank of New Zealand’s strong stance offers support, but a cautious global mood limits significant gains. This situation indicates that straightforward bets are risky, and traders might find range-focused derivative strategies more fitting in the days ahead. The RBNZ’s tough policy remains crucial for the Kiwi dollar. The central bank kept the Official Cash Rate at 5.50% in the second half of 2025, continually emphasizing a “higher for longer” approach to combat persistent inflation. This divergence from a weakening US Dollar, pressured by new trade threats, helps create a solid floor for the currency pair around the mid-0.5700s.

Chinese Data and Trading Strategies

Today’s Chinese economic data showed better-than-expected GDP growth of 1.2%. However, weak retail sales prevented a breakout. This mixed data from China is a familiar trend, reminiscent of the uneven recovery in 2024 and 2025, when industrial output often surpassed consumer spending. For now, Chinese data is less important for the Kiwi compared to US dollar developments. Since the pair is stuck in a familiar range, traders should consider strategies based on volatility. Current implied volatility for NZD/USD options is at multi-month lows, indicating that the market isn’t expecting a significant breakout soon. This environment could be suitable for strategies like short strangles or iron condors, which profit when prices stay within a specific range over the coming weeks. Create your live VT Markets account and start trading now.

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