• The New Zealand Dollar edges higher against the USD, approaching 0.5800.
• The unexpectedly strong China Trade Balance has provided support for the Kiwi.
• RBNZ-Fed monetary policy divergence has boosted the pair more than 3% higher in December.

The New Zealand Dollar maintains its positive trend intact in a calm week opening. The strong Chinese export figures seen earlier on Monday have boosted risk appetite in Asia, providing additional support to the New Zealand Dollar, which reached fresh six-week highs at 0.5790 before easing to the 0.5780 area.

The highlight of Monday’s Asian session has been the unexpectedly strong Chinese Trade Balance, which surpassed the $1 trillion surplus in November, for the first time in record, revealing the country’s resilience to the US trade tariffs.

China’s trade surplus grew to USD 111.68 billion in November, from USD 90.07 billion in October, beating expectations of a US 100.20 billion surplus. These figures are mainly due to a 5.9% year-on-year increase in exports, well beyond the 3.8% increase forecasted by market analysts, which follows a 1.1% yearly increase in October.

Risk-on markets, Fed easing hopes weigh on the Greenback

The risk-on mood triggered by the data release increased pressure on an already weak US Dollar. Investors are reluctant to place large US Dollar longs, awaiting the outcome of Wednesday’s Federal Reserve meeting, amid a nearly 90% chance of a quarter-point rate cut and pricing two or three more cuts in 2026.

The Reserve Bank of New Zealand, on the contrary, cut rates by 25 basis points in November but signalled the end of the easing cycle. The new RBNZ Governor, Anna Breman, pledged to be “laser focused on inflation” last week, which endorses the theory of a steady monetary policy in the near future. 

This, and the positive Chinese data, are contributing to lift the Kiwi, which has rallied more than 3% against the US Dollar in December so far.