NZD/USD rises above 0.5900 as US Dollar struggles ahead of US Retail Sales data

• NZD/USD strengthens after the release of key economic data from China.
• China's Q1 GDP expanded at an annual rate of 5.4%, exceeding market forecasts of 5.1%.
• The US Dollar struggles as escalating US-China trade tensions erode investor confidence in American assets.

NZD/USD continues its winning streak for the sixth successive day, trading around 0.5910 during the European hours on Wednesday. The pair appreciates as the New Zealand Dollar (NZD) gains ground following the release of key economic data from China.

China's Gross Domestic Product (GDP) grew at an annual rate of 5.4% in the first quarter of 2025, matching the pace seen in Q4 2024 and surpassing market expectations of 5.1%. On a quarterly basis, GDP rose by 1.2% in Q1, following a 1.6% increase in the previous quarter, falling short of the forecasted 1.4% gain.

Meanwhile, China's Retail Sales surged 5.9% year-over-year, beating expectations of 4.2% and up from February's 4%. Industrial Production also outperformed, rising 7.7% compared to the 5.6% forecast and February's 5.9% print.

The NZD/USD pair appreciates as the US Dollar (USD) faces headwinds due to eroding investor confidence in US assets amid escalating US-China trade tensions. The Wall Street Journal, citing informed sources, suggested that the Trump administration aims to leverage tariff negotiations to encourage US trading partners to reduce their engagements with China.

Late Tuesday, Bloomberg reported that US President Donald Trump initiated an investigation into potential tariffs on critical minerals, marking another move in the intensifying trade war that continues to affect key global economic sectors.

US Retail Sales data for March is set to be released later in the day, offering potential insights into how tariff-related uncertainties are impacting consumer spending. Additionally, Fed Chairman Jerome Powell is scheduled to deliver a speech during the late American session. Investors will likely turn their attention to the first-quarter CPI data, set for release on Thursday, as they seek insights into the Reserve Bank of New Zealand's (RBNZ) monetary policy trajectory.