NZD/USD edges higher to near 0.5750 despite weakened risk sentiment

• The NZD/USD pair may face challenges as escalating global trade tensions weaken investor risk appetite.
• China's retaliatory tariffs of up to 15% on select U.S. agricultural products took effect on Monday.
• San Francisco Fed President Mary Daly cautioned that growing business uncertainty could dampen demand in the US economy.

NZD/USD gains ground after registering losses in the previous session, trading around 0.5730 during the early European hours on Monday. However, the upside of the NZD/USD pair could be limited as rising global trade tensions dampened investors' risk appetite.

China's retaliatory tariffs of up to 15% on certain US agricultural products went into effect on Monday, in response to last week's US tariff increase from 10% to 20% on Chinese imports, given China's role as New Zealand's largest trading partner.

Additionally, the NZD faces headwinds following disappointing Chinese Consumer Price Index (CPI) data for February released on Saturday. China's Consumer Price Index fell by 0.7% year-over-year in February, exceeding market expectations of a 0.5% decline and reversing the 0.5% increase recorded in the previous month. On a monthly basis, CPI inflation stood at -0.2% in February, down from January's 0.7% and softer than the expected -0.1%.

On Friday, the US Bureau of Labor Statistics (BLS) showed that Nonfarm Payrolls (NFP) rose by 151,000 in February, falling short of the expected 160,000. January's job growth was also revised downward to 125,000 from the previously reported 143,000.

San Francisco Fed President Mary Daly said late Sunday that increasing uncertainty among businesses could weaken demand in the US economy but does not warrant a change in interest rates. Daly noted that business leaders in her district are expressing growing concerns about the economy and policy, which research indicates could dampen demand.