NZD/USD holds below 0.5650 ahead of New Year's holiday

• NZD/USD trades with a mild negative bias around 0.5635 in Tuesday's early Asian session. 
• A slower pace of Fed interest rate cuts in 2025 might lift the USD in the near term.
• RBNZ's dovish bets and Trump's tariffs threat weigh on the Kiwi, but fresh Chinese stimulus measures might cap its downside. 

The NZD/USD pair trades with mild losses near 0.5635 amid thin trading during the early Asian session on Tuesday. Investors brace for China's National Bureau of Statistics (NBS) Manufacturing and Non-Manufacturing Purchasing Managers' Index (PMI) data for December, which are due later on Tuesday.

The Federal Reserve (Fed) decided to cut the interest rates by a quarter point in the December meeting and projected that it will cut interest rates only twice in 2025, down from its original forecast for four. This, in turn, supports the US Dollar (USD) broadly and acts as a headwind for the pair. 

Data released by the National Association of Realtors (NAR) on Monday showed that the US Pending Home Sales rose by 2.2% on a monthly basis in November versus 1.8% (revised from 2.0%) prior. This reading came in better than the estimation of 0.7%. Meanwhile, the Chicago Purchasing Managers' Index eased to 36.9 in December from 40.2 in the previous reading, weaker than the 42.5 expected. 

The New Zealand Dollar (NZD) was one of the worst performers in the Group of 10, falling more than 10% against the greenback as of December 27. The dovish expectation by the Reserve Bank of New Zealand (RBNZ) and Donald Trump's tariff threat have exerted some selling pressure on the Kiwi against the USD. 

However, the fresh stimulus measure from the Chinese government over the weekend might help limit the NZD's losses, as China is a major trading partner for New Zealand. China's central government stated that it will offer handouts to people struggling with the cost of living and vowed more benefits for some unemployed people ahead of a key national holiday.