New Zealand Dollar extends upside as Chinese CPI inflation beats expectation

• The New Zealand Dollar edges higher in Friday’s Asian session. 
• The hotter Chinese CPI inflation data and lower expectations of the RBNZ interest rate cut support the Kiwi. 
• A stronger US Dollar might cap the pair’s upside. 

The New Zealand Dollar (NZD) trades in positive territory on Friday. The latest upbeat Chinese economic data spurs another bullish run for the Kiwi. It’s worth noting that any signs of recovery in the Chinese economy generally lift the NZD as China is New Zealand’s largest trading partner. Furthermore, a stronger-than-expected New Zealand employment report earlier this week threw cold water on expectations of the Reserve Bank of New Zealand (RBNZ) interest rate cut in the near term, which might continue to underpin the Kiwi in the near term. 

On the other hand, the renewed demand for the US Dollar (USD) might cap the upside for NZD/USD as the recent US Initial Jobless Claims ease some fears about the US labor market. Additionally, the heightened geopolitical risks in the Middle East could weigh on riskier assets like the Kiwi and create a headwind for NZD/USD.