NZD/USD softens to near 0.5900 ahead of China's trade deadline 

• NZD/USD slumps to around 0.5915 in Monday's Asian session.
• US July NFP report showed a deteriorating labor market, boosting the odds of a September Fed rate reduction.
• New Zealand's employment data will be the highlight later on Wednesday. 

The NZD/USD pair tumbles to near 0.5915 during the Asian trading hours on Monday. Tariff uncertainty between the United States (US) and China weighs on the China-proxy Kiwi. The downside might be limited due to a dismal US jobs report and rising September Federal Reserve (Fed) rate cut bets. Traders brace for New Zealand's Unemployment Rate data, which is due later on Wednesday. 

The weaker-than-expected US July employment data ramped up bets of imminent Fed rate cuts and acted as a headwind for the Greenback. Data on Friday showed US employment growth undershot expectations in July, while the Nonfarm Payrolls (NFP) count for the prior two months was revised down by a massive 258K jobs, indicating a sharp deterioration in US labour market conditions.

Markets are now pricing in nearly a 95% odds the Fed will ease rates next month owing to the weaker-than-expected US employment data, with over 63 basis points (bps) worth of cuts expected by December, according to Reuters. 

China is facing an August 12 deadline to reach a tariff deal with US President Donald Trump, after Beijing and Washington reached a preliminary deal in June to end weeks of escalating tit-for-tat tariffs, per Reuters. Any signs of escalating trade tensions could drag the China-proxy Kiwi lower, as China is a major trading partner of New Zealand. 

New Zealand's employment data for the second quarter (Q2) will be published later on Wednesday. The Unemployment Rate in New Zealand is expected to tick higher to 5.3% in Q2 from 5.1% in the previous reading. Any surprise stronger-than-expected outcome could lift the New Zealand Dollar (NZD) against the US Dollar (USD) in the near term.