NZD/USD gathers strength to above 0.5950 ahead of US PPI release

• NZD/USD strengthens to around 0.5965 in Wednesday's Asian session. 
• The upbeat Chinese Q2 GDP data support the China-proxy NZD. 
• Fed's Logan saw holding rates steady a while longer. 

The NZD/USD pair attracts some buyers to near 0.5965, snapping the three-day losing streak during the early Asian session on Wednesday. The better-than-expected China Gross domestic product (GDP) report provides some support to the China-proxy Kiwi. Investors will keep an eye on the US Producer Price Index (PPI) later on Wednesday, along with the Fed Beige Book and Industrial Production.

The Chinese economy grew 5.2% YoY in the April-June quarter from a year earlier, compared to 5.4% in Q1, according to the National Bureau of Statistics (NBS) on Tuesday. This figure came in higher than the estimation of 5.1%. Additionally, the Chinese Gross Domestic Product (GDP) rate rose 1.1% QoQ in Q2  after advancing 1.2% in the previous quarter, above the market consensus of 0.9%. 

China has avoided a sharp economic slowdown due to policy support and factories taking advantage of a US-China trade truce to front-load shipments. This, in turn, might underpin the China-proxy Kiwi in the near term, as China is a major trading partner of New Zealand.

The United States (US) and  China have until 12 August to renew that agreement or face a return to the painful bilateral tariffs that risked introducing a virtual embargo on trade between the world's two biggest economies. Any signs of renewed trade tensions could drag the NZD lower against the US Dollar (USD). 

On the USD's front, the cautious stance of the US Federal Reserve (Fed) could lift the Greenback and act as a headwind for the pair. Dallas Fed Bank President Lorie Logan said on Tuesday that the Fed will probably need to leave interest rates where they are for a while longer to ensure inflation stays low in the face of upward pressure from the Trump administration's tariffs. Financial markets expect the US central bank to stay on hold at the July meeting and then reduce by a quarter percentage point in September.