NZD/USD softens below 0.5750 amid trade war concerns

• NZD/USD loses ground to around 0.5730 in Thursday's early Asian session.
• Economists expect the RBNZ to further cut rates despite the upbeat GDP data. 
• Trump will place 25% tariffs on auto imports.

The NZD/USD pair edges lower to around 0.5730 during the early Asian session on Thursday. The fears of a global trade war ahead of US plans to unveil next week a swath of reciprocal tariffs and the rising expectation of the Reserve Bank of New Zealand (RBNZ) rate cut weigh on the Kiwi. 

Economists expect the RBNZ to deliver further cuts to the Official Cash Rate at each of the next meetings despite GDP figures last week surprising to the upside. This, in turn, might weigh on the New Zealand Dollar (NZD) against the USD. "And so we don't expect that this [GDP] upside surprise will have much impact on the near-term policy outlook, i.e., we continue to expect a 25bp cut in the OCR at the April and May meetings," said Westpac senior economist Darren Gibbs. 

US President Donald Trump said late Wednesday that he will impose a 25% tariff on auto imports, widening the global trade war. Trump said the tariffs would go into effect on April 2 and that the US would start to collect them a day later. Trump added that tariffs will likely be more "lenient than reciprocal," as the April 2 tariff deadline looms for a number of levies to go into effect. However, the uncertainty and unpredictability of Trump tariff policies raise concerns over the economic slowdown in the US, which could undermine the Greenback.