New Zealand Dollar remains firm above 0.5800 despite weak China GDP data

The NZD/USD pair trades in positive territory around 0.5825 during the Asian trading hours on Wednesday. The New Zealand Dollar (NZD) remains firm against the US Dollar (USD) after the Chinese economic data. The attention will shift to the US June Producer Price Index (PPI) report later on Wednesday. 

Data released by the National Bureau of Statistics (NBS) on Wednesday revealed that the Chinese economy expanded 4.3% YoY in the second quarter (Q2), compared to a 5.0% growth in the previous quarter, below the market consensus of 4.5%. This figure registered its weakest since 2022 and came below China’s full-year growth target range of 4.5% to 5.0%. 

On a quarterly basis, the Chinese Gross Domestic Product (GDP) rate grew 0.9% in Q2 after advancing 1.3% in Q1, in line with the market consensus.

Additionally, China’s Retail Sales rose by 1.0% YoY in June, versus -0.6% prior, better than the estimations of -0.1%. Industrial Production came in at 5.3%, compared to 4.5% in May, stronger than the 4.6% expected. The mixed Chinese economic data have little to no impact on the China-proxy Kiwi. 

On the USD’s front, traders reduce their bets on a July rate hike from the Fed after softer-than-expected US inflation data, undermining the Greenback and acting as a tailwind for the pair.  The odds of a July rate increase dropped to 16% from 42% on Monday, according to the CME FedWatch tool, although the probability of a rate hike this year was more robust at 80%, down from 89% on Monday.