NZD/USD Remains Weak, Trading Around 0.6130-0.6125

NZD/USD opened out of a mild bearish gap in Asia on Monday, but remained above the 0.6100 mark. NZD/USD remained weak around 0.6130-0.6125 with little volatility following the release of mixed Chinese macroeconomic data.

Data released by the National Bureau of Statistics of China on Monday showed that China’s total retail sales of consumer goods grew 3.7% year-on-year in May, compared with the expected value of 3% and the previous value of 2.3%. However, fixed asset investment and industrial production grew by 4.0% and 5.6%, respectively, which were lower than expected, largely offsetting the positive data. The data failed to provide any meaningful impetus for the Australian and New Zealand currencies, including the New Zealand dollar, while the slightly stronger US dollar continued to put pressure on NZD/USD.

The US dollar index (DXY), which tracks the US dollar against a basket of currencies, remained near its highest level since early May hit last Friday after the Federal Reserve (Fed) hawkishly predicted only one rate cut in 2024. Higher U.S. Treasury yields remain supportive of the outlook and continue to boost the dollar. This, combined with geopolitical tensions in the Middle East and the still-uncertain political outlook in Europe, supported risk aversion in the dollar and further enabled NZD/USD to maintain its three-day winning streak on Monday.

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