NZD/USD recovers early lost ground, moves back above mid-0.5900s amid softer USD

• NZD/USD attracts some dip-buyers on Monday amid a mildly softer US Dollar.
• Reduced Fed rate cut bets could limit deeper USD losses and cap spot prices.
• Trade-related uncertainties further warrant some caution for bullish traders.

The NZD/USD pair reverses a major part of its intraday losses and climbs to the 0.5965 region, or back closer to the daily peak during the early European session on Monday. Spot prices, however, remain confined in Friday's broader range, warranting some caution for aggressive traders.

The USD kicks off the new week on a softer note and remains on the defensive below its highest level since June 23 in the wake of mixed signals about the Federal Reserve's (Fed) rate-cut path. In fact, Fed Governor Christopher Waller last week backed the case for a rate cut in July. This, along with a generally positive risk tone, is seen undermining the safe-haven buck and lending some support to the risk-sensitive Kiwi.

Investors, however, seem convinced that the US central bank will keep interest rates higher for longer amid the evidence that the Trump administration's increasing import taxes are passing through to consumer prices. Apart from, persistent worries about the potential economic fallout from US President Donald Trump's erratic trade policies should limit any meaningful USD losses and keep a lid on the NZD/USD pair.

Hence, it will be prudent to wait for strong follow-through buying before positioning for a further appreciating move for spot prices in the absence of any relevant market-moving economic releases from the US on Monday. Later this week, traders will take cues from the release of the flash global PMIs to grab some short-term opportunities.