NZD/USD attracts some sellers below 0.5650, Trump's tariff policies in focus

• NZD/USD remains under selling pressure around 0.5645, down 0.53% on the day. 
• Trump said he is thinking in terms of 25% tariffs on Mexico and Canada next week. 
• New Zealand's PSI declined to 47.9 in December vs. 49.5 prior. 

The NZD/USD pair slumps to around 0.5645 during the Asian trading hours on Tuesday. The US Dollar (USD) rebounds after US President Donald Trump said that he intends to impose 25% tariffs on Canada and Mexico on February 1. 

Trump stated on Monday that tariffs could be levied against Mexico and Canada as soon as early February, per CNBC. "We're thinking in terms of 25% (levies) on Mexico and Canada because they're allowing cast number of people" over the border, Trump said. The Greenback recovers some lost ground following this report.

Meanwhile, the US dollar Index (DXY), a measure of the USD's value relative to its most significant trading partners' currencies, bounced off the two-week low and edges higher above 108.50, gaining 0.40% on the day.

Investors will closely monitor the development surrounding tariff policies, as Trump had also threatened China with tariffs of up to 60% in December. If he imposes any tariffs on China, this could weigh on the Kiwi, as China is a major trading partner to New Zealand. 

Data released by Business NZ on Tuesday showed that New Zealand's Performance of Services Index (PSI) eased to 47.9 in December from 49.5 in November. This figure has now been in contraction for ten consecutive months. The downbeat report contributes to the New Zealand Dollar's (NZD) downside.