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USD consolidates near 0.5880 as New Zealand trade data surprises to the upside

New Zealand’s Q2 2025 trade data came in stronger than expected, reinforcing optimism over the country’s external sector. The overseas trade index rose 4.1% q/q, beating forecasts of 2.0% and accelerating from the prior 1.9%. Exports surged 9.9% y/y to USD 28.9 billion, led by a 12% jump in goods exports and a 5.4% gain in services. Imports, meanwhile, grew a more modest 3.2%, highlighting a favourable trade balance and improved terms of trade.

The data suggests that New Zealand exporters are benefiting from both resilient global demand and a softening in import costs. With export prices firming while import prices eased, the trade balance tilted in favour of the New Zealand dollar. This provides a fundamental anchor at a time when global risk sentiment remains volatile.

Market reaction was moderate. NZD/USD held close to 0.5880, consolidating near recent lows. Technical charts indicate strong support at 0.5860, with a deeper floor around 0.5800. On the topside, resistance is seen at 0.5960, followed by the more decisive 0.6050. Importantly, the descending trendline connecting the July high at 0.6050 and the August high at 0.5960 continues to cap upside momentum. A break above this line would be viewed as a bullish signal, potentially opening the way for a broader recovery.

Looking ahead, traders will shift their attention to Eurozone CPI and the upcoming US PMI release later in the global session. A softer US print could provide the catalyst for NZD/USD to break above 0.5960, while stronger US data may renew pressure on the pair. In the near term, the balance of risks remains tilted toward a cautious rebound, though the sustainability of any rally will depend on dollar flows and broader risk appetite.

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