Forex News: NZ Dollar Rises After Upbeat China Data

NZ Dollar Rises After Upbeat China Data

(RTTNews) - The New Zealand dollar strengthened against other major currencies in the Asian session on Monday, after China's industrial production and retail sales increased more than expected in the January to February period.

Data from the National Bureau of Statistics showed that industrial output increased 6.3 percent on a yearly basis, faster than the expected growth of 5.3 percent.

Similarly, retail sales advanced 2.8 percent from a year ago in the first two months of the year, following a 0.9 percent rise in December. Sales were expected to grow 2.6 percent.

At the same time, fixed asset investment climbed 1.8 percent, confounding expectations for a decline of 5.0 percent.

Meanwhile, Asian stock markets traded lower as traders remain cautious and concerned about the escalating war in the Middle East and its impact on energy prices, inflation, economic growth and monetary policy. The prevailing uncertainty about the timeline for ending the war is weighing on overall market sentiment.

Over the weekend, the U.S. struck military targets near Kharg Island, Iran's main oil export hub, and warned it could expand attacks on energy infrastructure if shipping through the Strait of Hormuz is disrupted.

U.S. Treasury Secretary Scott Bessent said the U.S. Navy may soon escort oil tankers through the Strait of Hormuz, perhaps with an international coalition.

Traders are also keeping a keen eye on the US Fed's latest monetary policy decision later in the week. With the Fed widely expected to leave interest rates unchanged, traders are likely to focus on central bank officials' latest projections for rates and the economy.

With inflationary concerns accelerating across the globe, economists predict that most of the major global economies would hold back on any rate cuts in the near-term.

Traders remain concerned the spiking crude oil prices and the resultant inflation will lead to back-to-back rate hike as the Reserve Bank of Australia readies to deliver its monetary policy decision on Tuesday.

Crude oil prices again showed a substantial move to the upside as uncertainty prevails about the timeline for ending the war. West Texas Intermediate crude for April delivery was up $3.35 or 3.50 percent at $98.08 per barrel.

In the Asian trading today, the NZ dollar rose to a 5-day high of 1.2055 against the Australian dollar, from last week's closing value of 1.2089. The kiwi may test resistance around the 1.97 region.

Against the U.S. dollar, the yen and the euro, the kiwi advanced to 0.5815, 92.76 and 1.9695 from Friday's closing quotes of 0.5775, 92.24 and 1.9771, respectively. If the kiwi extends its uptrend, it is likely to find resistance around 0.59 against the greenback, 94.00 against the yen and 1.94 against the euro.

Looking ahead, Canada housing starts and CPI data for February, U.S. NY Empire State manufacturing index for March, U.S. industrial and manufacturing productions for February and U.S. NAHB housing market index for March are slated for release in the New York session.

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