WELLINGTON (Dow Jones)--The New Zealand dollar ended slightly higher as weak trade data from China failed to whittle all of the gains made overnight due to the buoyant risk appetite. ANZ foreign exchange manager Murray Hindley said the New Zealand dollar had been relatively range bound against the U.S. dollar during trading but was now moving toward the weaker end of that range following the release of the data. "The weaker Chinese trade data saw a softer euro and softer commodity currencies," he said. Chinese customs data showed China's trade surplus in August narrowed sharply to $20.03 billion compared with a $28.7 billion surplus in July and below the $30.0 billion surplus economists had expected. BNZ currency strategist Mike Jones said the New Zealand dollar had gained overnight due to improving sentiment after better-than-expected data out of the U.S. "U.S. data continued its recent improving tone, keeping markets' relatively buoyant risk appetite intact," he said. Although New Zealand's second-quarter terms of trade were expected to have some influence, markets largely overlooked the slightly disappointing 2.1% rise in the terms of trade index, and continued to take cues from offshore. Jones said that there was a slew of economic data due out from China Saturday that would influence the markets on Monday. Hindley said there was plenty of local data next week to give the New Zealand dollar direction with food prices, retail trade, and the Reserve Bank of New Zealand's rate decision on the agenda. Government bonds were slightly weaker while swap rates pushed a tad higher but a local bond trader said there was very little action in the market. Investors are shifting their attention to next week's central bank rate review. While the market is widely expecting the Reserve Bank to keep the Official Cash Rate on hold at 3.0%, there will be intense interest in the accompanying statement for any clues as to when it might resume its tightening track. The bond trader said news the government might launch a September 2025 inflation-indexed bond program as early as November was positive as it signaled further diversification and could potentially mean it has to issue fewer nominal bonds. -By Lucy Craymer, Dow Jones Newswires; 64-4-471-5990; lucy.craymer@dowjones.com

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