NZD/USD holds losses near 0.5850 due to further RBNZ rate cut bets

• NZD/USD struggles as traders expect the RBNZ to deliver more rate cuts.
• Trump could impose a 200% tariff on Chinese goods if Beijing refuses to supply magnets to the US.
• Fed Governor Lisa Cook's exit may boost the odds of earlier rate cuts.

NZD/USD has trimmed its losses from the previous session, trading around 0.5850 during the early European hours on Wednesday. The pair depreciates as the New Zealand Dollar (NZD) struggles amid prevailing sentiment of further policy easing by the Reserve Bank of New Zealand (RBNZ), following last week's rate cut.

RBNZ Governor Christian Hawkesby noted that the policy outlook is guided by data, but emphasized that if businesses and consumers stay cautious and require additional support, it could warrant further measures.

US President Donald Trump warned that impose a 200% tariff on Chinese goods if Beijing refuses to supply magnets to the United States (US), putting the fragile truce between the world's two largest economies at risk. It is worth noting that any change in the Chinese economy could influence NZD as China and New Zealand are close trading partners.

The downside of the AUD/NZD pair could be limited as the US Dollar may struggle from rising Fed concerns, along with a dovish tone surrounding the central bank's policy outlook. Trump announced early Tuesday that he was removing Fed Governor Lisa Cook from her position on the Fed's board of directors. He also said that he was ready for a legal fight with Cook over falsified mortgage documents.

The dismissal of Fed Governor Cook could increase the likelihood of heavy interest rate cuts, given Trump's ongoing pressure on the central bank to reduce borrowing costs. Traders are now pricing in more than 87% odds for a cut of at least a quarter-point at the Fed's September meeting, up from 84% previous day, according to the CME FedWatch tool.