NZD/USD climbs near 0.5950 after China surplus, RBNZ inflation outlook

• NZD/USD appreciates as China's Trade Surplus widened in July.
• RBNZ's average one-year Inflation Expectations fell to 2.37% in Q3, while two-year inflation expectations eased to 2.28%.
• Fed's Daly stated that the central bank still has work to do in its battle against inflationary pressures.

NZD/USD extends its gains for the second successive session, trading around 0.5950 during the Asian hours on Thursday. The pair appreciates following the release of China's trade balance and the Reserve Bank of New Zealand's (RBNZ) Inflation Expectations data. Traders' focus is shifted toward the US weekly Initial Jobless Claims due later in the North American session.

China's Trade Surplus increased to CNY705.10 billion in July, from the previous figure of CNY585.96 billion. Exports climbed 8.0% YoY in July after a 7.2% increase in June, while imports rose 4.8% YoY against 2.3% prior. In US Dollar (USD) terms, China's Trade Balance arrived at 98.24 billion, falling short of the 105.0 billion expected increase and the 114.77 billion recorded previously.

RBNZ's Inflation Expectations declined on a 12-month and a two-year time frame for the third quarter of 2025. NZ average one-year Inflation Expectations declined to 2.37% in Q3, against 2.41% in the second quarter. Meanwhile, two-year inflation expectations eased to 2.28% in Q3 from 2.29% seen in Q2.

Market sentiment remains cautious as the weaker-than-expected labor market report boosts expectations that the US Federal Reserve (Fed) will deliver a 25 basis point rate cut in September. San Francisco Fed President Mary Daly noted on Wednesday that the Fed still has some ground to cover on its fight with inflation pressures despite overall progress. Daly highlighted that the Fed may be forced to act soon without having the full picture.