The NZD/USD extends the rebound above 0.6050 as commercial conversations between the US and China continue

• The NZD/USD gains strength to around 0.6055 in the Asian session on Tuesday.
• Commercial conversations between US officials and China were scheduled to resume on Tuesday.
  The RBNZ could slow down the rhythm of rates cuts as uncertainty grows.

The NZD/USD pair extends its rise to about 0.6055 during the first Asian session on Tuesday. The New Zealand dollar (NZD) is strengthened against the US dollar (USD) amid the hope of commercial conversations between the US and China. The second day of commercial conversations will be at the Care Center on Tuesday.

Investors are optimistic about negotiations between the US and China, although no significant advances were announced after the first day of conversations. US President Donald Trump said conversations “should be very good.” US officials indicated that the elimination of restrictions on some technological exports was indicated in exchange for guarantees that China is relaxing the limits on rare earth shipments, which are critical for a wide range of energy, defense and technology products. The expectations of commercial conversations between the US and China, since officials adopted a positive tone after the first day of negotiations, support the Kiwi as Proxy of China, since China is an important commercial partner of New Zealand.

In addition, the growing bets that the New Zealand Reserve Bank (RBNZ) will slow down the rhythm of interest rate cuts as uncertainty grows could contribute to the rise of the NZD. “While the RBNZ degraded its economic forecasts compared to February and emphasized the high degree of uncertainty around global conditions, there was a surprising amount of caution around the moment and the extension of future ECR cuts,” said the senior economist of Westpac, Michael Gordon.