NZD/USD struggles below one-week top; around 0.5670 as USD attracts safe-haven flows

• NZD/USD struggles to capitalize on Friday's strong move up to an over one-week high.
• A weaker risk tone drives safe-haven flows towards the USD and weighs on the Kiwi.
• China's economic woes and RBNZ rate cut bets also contribute to capping spot prices.

The NZD/USD pair kicks off the new week on a subdued note and oscillates in a narrow band around the 0.5670-0.5675 region during the Asian session. Spot prices, however, remain close to a one-and-a-half-week high, around the 0.5700 neighborhood, touched on Friday amid mixed cues.

US President Donald Trump on Friday removed tariffs on roughly $1.25 billion worth of New Zealand's exports to the country, which is seen as a key factor acting as a tailwind for the NZD/USD pair. However, concerns about China's economy, along with bets for another interest rate cut by the Reserve Bank of New Zealand (RBNZ) at the November 26 meeting, hold back traders from placing aggressive bullish bets around the New Zealand Dollar (NZD).

The US Dollar (USD), on the other hand, attracts some safe-haven flows amid a generally weaker tone around the equity markets and contributes to capping the risk-sensitive NZD/USD pair. Any meaningful USD appreciation, however, seems elusive amid worries about the weakening economic momentum on the back of the longest-ever US government shutdown. This, along with dovish Federal Reserve (Fed) expectations, might keep a lid on further gains for the buck.

According to the CME Group's FedWatch Tool, traders are still pricing in around a 50% chance that the US central bank will lower borrowing costs next month. Adding to this, hopes for further stimulus from China offer some support to antipodean currencies, including the Kiwi. This, in turn, warrants some caution before confirming that the NZD/USD pair's bounce from the vicinity of the 0.5600 mark, or a multi-month low, has run its course and positioning for deeper losses.