NZD/USD tumbles below 0.5750 amid US-China trade tensions, RBNZ rate cut bets

• NZD/USD attracts some sellers to around 0.5720 in Friday's early European session, down 1.22% on the day. 
• Potential US-China trade war and RBNZ rate cut bets weigh on the Kiwi. 
• Investors will closely monitor the US NFP data, which is due later on Friday.

The NZD/USD pair falls to near 0.5720 during the early European session on Friday. The fears of an escalation of a trade war between the United States (US) and China exert some selling pressure on the China-proxy Kiwi. The highly-anticipated US Nonfarm Payrolls (NFP) for March will be released later on Friday.

The Reserve Bank of New Zealand (RBNZ) is expected to cut the interest rates by 25 basis points (bps) at its April meeting next week. The New Zealand central bank has cut rates by a cumulative 175 bps since August last year. UBS analysts suggested that the RBNZ would maintain a dovish stance throughout this cycle, and the central bank may consider a more aggressive 50 bps rate cut in its upcoming meeting. The rising bets of RBNZ rate reductions could weigh on the New Zealand Dollar (NZD) against the Greenback. 

Additionally, US President Donald Trump would impose a 54% total tariff rate on imports from China, starting April 9. Chinese imports had already been subject to a 20% tariff. An additional 34% in reciprocal tariffs will be imposed, according to the official.  The potential trade war between the world's two largest economies could drag the China-proxy Kiwi lower as China is a major trading partner to New Zealand.

The broader US Dollar weakness might help limit the NZD's losses. The US March employment data is due on Friday, including Nonfarm Payrolls (NFP), Unemployment Rate and Average Hourly Earnings. In case of a weaker-than-expected outcome, this could undermine the Greenback and cap the downside for the pair. The Federal Reserve (Fed) Chair Jerome Powell, Michael Barr, and Christopher Waller are scheduled to speak later on the same day.