NZD/USD extends the rally to near 0.6000 ahead of RBNZ rate decision

• NZD/USD gains momentum to near 0.6000 in Tuesday's early Asian session.
• Investors remain concerned over the mounting US national deficit, which weighs on the US Dollar. 
• The RBNZ is set to cut interest rates for the sixth consecutive meeting on Wednesday. 

The NZD/USD pair extends its upside to around 0.6000 during the early Asian session on Tuesday. The US Dollar (USD) edges lower against the New Zealand Dollar (NZD) amid renewed trade tensions and growing concerns about the US fiscal outlook. The Reserve Bank of New Zealand (RBNZ) interset rate decision will be in the spotlight on Wednesday. 

Despite US President Donald Trump delaying the imposition of tariffs on Europe, investors remain concerned over the mounting US national deficit. This, in turn, continues to undermine sentiment towards US assets and drag the USD lower broadly. 

The attention will shift to the debate in the US Senate on Trump's tax-cut bill that is expected to add to the debt pile in the world's largest economy. Investors await the US Conference Board's Consumer Confidence report, which is due later on Tuesday. Also, Durable Goods Orders and the Dallas Fed Manufacturing Index will be released.

The RBNZ is expected to lower the Official Cash Rate (OCR) by 25 basis points (bps) to 3.25% at its May meeting on Wednesday, according to Bloomberg. The New Zealand central bank is open to further easing as US trade barriers dim the economic outlook, which might weigh on the Kiwi. "We see the RBNZ's OCR profile being revised down by around 20 basis points to around 2.9% by the end of 2025," said Kelly Eckhold, chief economist at Westpac in Auckland.