NZD/USD retreats from multi-week highs on mixed Chinese data

• NZD/USD pauses a two-day winning streak in the Asain session.
• Mixed Chinese data points to concerns on the pace of economic growth.
• A bounce in the US dollar drags the pair in the corrective mode.

After posting solid gains in the last two sessions, the NZD/USD pair seems to halt its upside momentum. The pair opened on an optimistic tone and touched the intraday high near 0.7180 before reversing to the lows in the vicinity of 0.7150.

At the time of writing, NZD/USD is trading at 0.7158, down 0.15% on the day.

The pair has enjoyed the rally as investors’ risk perception shifts temporarily. On the domestic side, the Business NZ Performance of Manufacturing Index jumped to a record 63.6 in March from 54.4, a month earlier. However, the data proves to be ineffective for the kiwi.

China reported GDP growth at 0.6% in March as compared to 3.% previously on a quarterly basis. It missed the market expectation of 1.5% whereas it witnessed an expansion on a yearly basis from 6.5% to 18.3% in March. However, the growth figure still missed the market expectation at 19%.

The Industrial Production readings came at 14.1% in March as compared to 35.% on a yearly basis, below the market consensus of 16%. The Retail sales posted impressive growth from 33.8% YoY to 34.2% in March, beating the market expectations at 28%.

That said, the focus now shifts to global risk sentiment, as the rising cases of coronavirus across regions put the pace of the economic recovery in danger. The mixed Chinese data weigh adversely on the NZD/USD pair, as China is the biggest trading partner for kiwi.

The US Dollar Index (DXY) rebounds from the multi-week lows near 91.45 following the uptick in the US Treasury yields, which posted gains of 3.24%, from 1.56% to 1.58% on the day. The upbeat US retail sales data reaffirms the pace of economic recovery in the US.

It is worth noting that the equities are trading on the negative side, which suggests the heightened risk-off mode. The S&P 500 futures are at 4,157, down 0.13%. This, in turn, also adds to the attractiveness of the greenback.

As for now, the dynamics around the US dollar continue to influence the pair’s performance.

NZD/USD levels to watch