NZD/USD hovers around 0.5950 due to easing global trade concerns

• NZD/USD maintains its position following Trump's indication of ongoing trade discussions, which has helped ease global trade concerns.
• The US Dollar may further strengthen as June inflation report raised the likelihood of Fed maintaining its current interest rates.
• The NZD may continue to weaken as the RBNZ is widely expected to implement additional rate cuts in upcoming meetings.

NZD/USD edges higher after three days of losses, trading around 0.5950 during the early European hours on Wednesday. The pair maintains its position as the global trade concerns ease a little following Trump's indication of willingness to further engage in trade discussions, indicating the possibility of negotiating with the European Union (EU) and other key trading partners.

However, Trump indicated on Tuesday to prepare to send tariff letters soon to smaller countries, including nations in Africa and the Caribbean, per Reuters. Trump further stated that his administration would likely set a tariff of "a little over 10%" for those countries.

The upside of the NZD/USD pair could be limited as the US Dollar (USD) may regain its ground as the US inflation report for June has renewed concerns over the prospect of prolonged high interest rates from the Federal Reserve (Fed).

The US Consumer Price Index (CPI) climbed 2.7% year-over-year in June, as expected. Core CPI came in at 2.9%, just below the 3.0% forecast but still notably above the Federal Reserve's 2% target. Traders await the US Producer Price Index (PPI) later on Wednesday, followed by the Fed Beige Book and Industrial Production.

Dallas Fed President Lorie Logan spoke at a World Affairs Council event in San Antonio on Tuesday, noting that the US central bank will probably need to leave interest rates where they are for a while longer to ensure inflation stays low in the face of upward pressure from the Trump administration's tariffs.

Chinese Vice Premier He Lifeng said on Wednesday that officials are stepping up efforts to boost consumption to shore up the Chinese economy. It is important to note that any change in the Chinese economy could impact the New Zealand Dollar (NZD) as China and New Zealand are close trading partners.

The NZD may further lose ground as the Reserve Bank of New Zealand (RBNZ) is widely expected to deliver more rate cuts in the upcoming meetings, driven by the subdued activity in both the manufacturing and services sectors. The RBNZ decided to leave its official Cash Rate (OCR) unchanged at 3.25% last week.