NZD/USD grapples to break below 0.5600 ahead of US PCE inflation data

• NZD/USD struggles due to rising concerns over global trade tensions and domestic monetary policy.
• The ANZ-Roy Morgan Consumer Confidence index rose to 96.6 in February, slightly higher than January's 96.0.
• Traders adopt caution ahead of the Personal Consumption Expenditures Price Index, the Fed's preferred inflation measure.

NZD/USD continues its losing streak that began on February 21, hovering around 0.5600 during early European trading on Friday. The New Zealand Dollar (NZD) faces downward pressure despite a private survey indicating a slight rise in consumer confidence for February, as concerns over global trade tensions and domestic monetary policy persist.

The ANZ - Roy Morgan Consumer Confidence inched up to 96.6 in February from 96.0 in the previous month. However, economic outlook perceptions for the next 12 months declined to -16%, while expectations for house price inflation saw a modest increase.

The NZD/USD pair weakens as the safe-haven US Dollar (USD) strengthens amid heightened fears of a global trade war. US President Donald Trump reaffirmed that his proposed 25% tariffs on Mexican and Canadian goods will take effect on March 4, alongside an additional 10% tariff on Chinese imports due to ongoing drug trafficking concerns.

Further exacerbating trade tensions, Trump imposed new tariffs on Chinese goods, adding to the 10% levies introduced on February 4 in response to the fentanyl opioid crisis, bringing the total tariff to 20%. Any further tariff threats from the US could pressure the China-linked NZD, given China's role as New Zealand's primary trading partner.

Investors now turn their attention to the Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's preferred inflation measure, set for release later in the day.