NZD/USD gathers strength above 0.5700 as growth concerns weigh on US Dollar

• NZD/USD trades on a positive note near 0.5700 in Friday's early Asian session. 
• Concerns over the US economic slowdown weigh on the US Dollar. 
• Deflationary pressures in China and rising bets of further RBNZ rate cuts might cap the downside for the pair. 

The NZD/USD pair edges higher to around 0.5700 during the early Asian session on Friday. The growing concerns about US trade policies weigh on the US Dollar (USD) and create a tailwind for the pair. Later on Friday, traders will keep an eye on the preliminary Michigan Consumer Sentiment.

A series of weaker-than-expected US economic data, including the latest Consumer Price Index (CPI) inflation report, raises the fear about the potential impact of intensifying tariff wars on US economic growth. This, in turn, might drag the Greenback lower against the New Zealand Dollar (NZD) in the near term. 

Data released by the US Bureau of Labor Statistics on Thursday showed that the US Producer Price Index (PPI) rose 3.2% YoY in February, compared to the rise of 3.7% seen in January. This figure came in softer than the estimation of 3.3%. The core PPI rose 3.4% YoY in February versus 3.8% prior. On a monthly basis, the PPI was unchanged in February, while the core PPI declined by 0.1% during the same reported period. 

Nonetheless, the upside for the pair might be capped amid concerns over persistent deflationary pressures in China. China's Consumer Price Index (CPI) in February missed expectations and fell at the sharpest pace in 13 months, while producer price deflation persisted. This report could undermine the China-proxy Kiwi, as China is the largest trading partner of New Zealand. 

Additionally, the expectation of further rate cuts from the Reserve Bank of New Zealand could undermine the NZD, though the RBNZ emphasized a more cautious approach to future moves. RBNZ Governor Adrian Orr said the board is forecasting a lower terminal rate than in its November projections and expects two more 25 basis points (bps) rate reductions in April and May, subject to economic conditions evolving as expected.