NZD/USD aims for gains over 0.6090 on weaker-than-anticipated Chinese inflation figures

NZD/USD refreshes daily high, inches back closer to mid-0.6100s amid weaker USD. NZD/USD catches fresh bids on Monday amid the prevalent USD selling bias.

After a fantastic performance in the Asian session, the NZD/USD pair has completed the time-based correction. The asset has had a dramatic increase and is currently trading around 0.6080. After surpassing the round-level resistance of 0.6100, the major currency is positioned for additional gains. The asset has not responded well to China's Consumer Price Index (CPI) data that exceeded expectations.

Annually, China's CPI has settled at 2.5%, which is below both predictions and the previous release of 2.8% and 2.7%, respectively. While the monthly figure is negative by 0.1% compared to 0.2% as anticipated and 0.5% as previously released. A reduction in China's inflation will compel the People's Bank of China (PBOC) to adopt a dovish tone and further reduce the Prime Lending Rate (PLR). In addition, a greater influx of liquidity into the economy will increase the volume of economic activities.

Notably, New Zealand is China's biggest trade partner, and increased economic activity in China will accelerate exports and further boost their Trade Balance.

Early in the Tokyo session, Stats NZ reported record-breaking sales of electronic cards. The economic statistics climbed by 26.9% versus an annual loss of 0.5%. In addition, the monthly statistics improved by 0.9% compared to June's decline of 0.2%.

In the meantime, the US dollar index (DXY) is falling before to the release of inflation statistics. The DXY has fallen to around 109.10 and further decline is anticipated. Reuters highlighted the words of US Treasury Secretary Janet Yellen on the inflation rate, in which she stated that reduced gasoline prices may exert additional downward pressure on headline consumer price inflation for August. This has depreciated the DXY due to anticipation of future inflation fall.