NZD/USD Slumps on China Trade Data, Eyes Set on Key US Economic Reports

The New Zealand Dollar has been struggling after China released its trade balance data. The NZD/USD pair continues to depreciate, trading around 0.5850 during Asian hours on Tuesday.

China's August Trade Balance reached $119.09 billion, aligning closely with forecasts and improving on July's figure. Exports grew by 25% year-over-year, while imports rose by 28.2%, but fell short of the expected 30% expansion.

The softness in Chinese trade data has put pressure on the New Zealand Dollar, which is sensitive to China's economic performance as its major trading partner. However, ongoing weakness in the US Dollar could cushion further downside for the NZD/USD pair.

Investors are now awaiting the upcoming US Producer Price Index and Consumer Price Index reports later this week to gauge the Fed's next policy move. A Federal Reserve rate hike in September is priced in with a greater than 60% probability, bolstered by a stronger-than-expected August US labor report.