New Zealand Dollar retreats as Chinese imports fall short of expectations

The New Zealand Dollar (NZD) weakened by 0.37% on Tuesday, settling near 0.5855 against the US Dollar (USD) as Chinese imports fell short of market expectations. China's trade surplus expanded to $119.09 billion in August, up from $112.5 billion in July, while exports rose by 25% year-over-year, accelerating from a 23.9% increase in the previous month.

However, imports grew by 28.2% year-over-year, up from 27.5% in July, but below the 30% expansion anticipated by traders. This suggests that Chinese domestic demand remains weak, negatively impacting the NZD due to the strong trade ties between China and New Zealand. Despite this, the NZD's decline remains contained by the broader weakness in the USD.

Investors are now focusing on upcoming releases of the US Producer Price Index (PPI) and Consumer Price Index (CPI) for insights into the Federal Reserve's monetary policy stance. The latest US jobs data, with nonfarm payrolls increasing by 162,000 and the unemployment rate remaining unchanged, supports expectations of a potential Fed interest-rate hike in September.

Geopolitical tensions between the US and Iran, which have the potential to disrupt oil traffic through the Strait of Hormuz, also contribute to elevated energy prices, further pressuring the NZD. As NZD/USD trades at 0.5858, the pair is struggling to break above the 100-hour and 200-hour simple moving averages and is currently supported by the nearby horizontal level at 0.5856.

Should selling pressure resume, support may be found near 0.5836, while resistance can be found at the 100-hour and 200-hour SMAs and the 0.5903 horizontal barrier.