On Wednesday (April 16th), the Australian dollar and the New Zealand dollar continued their five-day upward trend. China's latest retail sales and industrial output data for March far exceeded expectations, like a shot in the arm, effectively hedging the shadow of global trade tensions. Data shows that before the US imposed tariffs, the Chinese economy had already accumulated strong endogenous momentum.

AUD/USD rose by 0.2% to 0.6356 at one point, and hit a high of over a week at 0.6381 overnight. The Australian dollar still faces strong technical resistance in the $0.6395/6409 region, which has hindered its previous three rebounds.

NZD/USD rose 0.4% to 0.5921 at one point, hitting a five month high of 0.5943 overnight. If it can continue to break through $0.5929, it will reach the November high of $0.6037.

However, analysts from ANZ Bank have issued a warning that the uncertainty of the global tariff war is forming a 'Damocles sword', which may dampen consumer and investment confidence. Sharon Zollner, the head of New Zealand economics at the bank, revealed that it is expected that the official overnight repo rate (OCR) in New Zealand will be lowered to a historic low of 2.5% twice in August and October, which is more aggressive than the previous forecast of 3%. The market is widely betting that the Reserve Bank of New Zealand will initiate a 25 basis point rate cut at its May meeting, and the autumn interest rate may fall below 2.75%.

Summary: The hidden risks behind the currency frenzy

Although China's economic data briefly illuminated the foreign exchange market, technical resistance and expectations of policy easing are forming a long short tug of war. Investors need to be vigilant about the volatility that may arise from sudden changes in tariff policies, while closely monitoring the upcoming interest rate cut cycle of the Reserve Bank of Australia and New Zealand. This data-driven upward trend may face new variables.