NZD/USD quote above 0.5650 after cutting recent losses

• NZD/USD experiences an upward technical correction despite the increase in risk aversion.
• The NZD faced challenges since China’s retaliation tariffs on certain US exports have entered into force.
• The US dollar received support for the growing feeling of caution around the perspectives of the Fed policy.

The NZD/USD cuts its recent losses, quoting around 0.5660 during the first European hours on Monday. However, the pair could face challenges again amid growing concerns for the commercial war. The president of the USA, Donald Trump, told journalists aboard the Air Force One that plans to impose a 25% tariff on all imports of steel and aluminum without specifying the affected countries.

President Trump also declared that additional reciprocal tariffs will be announced in mid -week, which will almost immediately enter into force, matching the tariff rates imposed by each country, according to Reuters.

The New Zealand dollar was also weakened in the midst of growing concerns about the commercial war between the US and China, given the close economic ties of New Zealand with China. A new American tax on Chinese imports entered into force last week, while China’s retaliation tariffs on certain US exports began on Monday.

The American dollar index (DXY), which measures the value of the US dollar compared to six main currencies, maintains its position above 108.00 at the time of writing. The dollar receives support since the US Federal Reserve is expected lower unemployment rate.

The president of the Bank of the Federal Reserve (FED) of Chicago, Austan Goolsbee, mentioned Friday that the inconsistent policy approaches of the US government cause a high level of economic uncertainty that makes it difficult to determine where it is directed The economy, and specifically inflation.

Meanwhile, the member of the Board of Governors of the FED, Adriana Kugler, said that the growth and economic activity of the US are healthy in general, but stressed that progress towards the inflation objectives of the Fed Ha been somewhat unequal, according to Reuters.