New Zealand Dollar edges lower below 0.5900 as China’s economy slows in July

The New Zealand Dollar (NZD) fell below 0.5900 during Asian trading hours on Tuesday as weak Chinese economic data weighed on the currency. Retail Sales and Industrial Production numbers released by China's National Bureau of Statistics came in below expectations, contributing to the decline. Industrial Production rose 4.5% year-over-year in July, down from 5.3% in June, marking the first decline in three months.

The lower-than-anticipated figures reflected a slowdown in China's economy, which is a major trading partner for New Zealand. Analysts noted that geopolitical pressures and domestic high temperatures also impacted China's economic performance. Despite a potential rate hike delay by the US Federal Reserve, markets now anticipate a near-65% chance of a pause in interest rate hikes.

This could weaken the US Dollar, providing support for the NZD. The RBNZ is set to discuss the economy at its next monetary policy meeting, with expectations of a hawkish stance despite softer inflation indicators. The NZD/USD pair is currently approaching the Bollinger upper band and shows a bullish bias, while support levels are provided by the Bollinger middle band and the 100-day moving average.