NZD/USD sticks to modest intraday gains below 0.5900 amid softer USD

• NZD/USD gains positive traction at the start of a new week amid a modest USD downtick.
• The mixed Chinese macro data do little to provide any meaningful impetus to spot prices.
• A weaker risk tone lends support to the safe-haven buck and caps the risk-sensitive Kiwi.

The NZD/USD pair attracts some dip-buyers during the Asian session on Monday amid a modest US Dollar (USD) weakness, though it seems to struggle to capitalize on the move beyond the 0.5900 mark.

Investors seem convinced that the Federal Reserve (Fed) will cut interest rates further amid signs of easing inflationary pressures and the likelihood that the US economy will experience several quarters of sluggish growth. Moreover, Moody's downgraded America's top sovereign credit rating by one notch, to "Aa1" on Friday, citing concerns about the nation's growing debt pile. This, in turn, keeps the USD bulls on the defensive and turns out to be a key factor acting as a tailwind for the NZD/USD pair.

Meanwhile, traders react little to mixed Chinese macro data released earlier today. The National Bureau of Statistics (NBS) reported on Monday that China's Retail Sales rose by 5.1% year-over-year (YoY) in April, falling short of the 5.5% forecast and down from 5.9% in March. Industrial Production grew by 6.1% YoY during the same period, beating the expected 5.5%, while Fixed Asset Investment rose 4.0% year-to-date (YTD) YoY in April, below the 4.2% forecast and March's reading.

The data does little to provide any meaningful impetus, though the optimism over the US-China trade truce continues to lend support to antipodean currencies, including the Kiwi. The upside for the NZD/USD pair, however, remains capped in the wake of a turnaround in the global risk sentiment, which is holding back the USD bears from placing aggressive bets. Hence, it will be prudent to wait for strong follow-through buying before positioning for any further appreciating move for the major.