NZD/USD stays near 0.5700 as Trump removes tariffs on New Zealand exports

• NZD/USD received support after President Trump removed tariffs on roughly $1.25 billion of New Zealand exports.
• The New Zealand Dollar could weaken as sluggish data boosts expectations of an RBNZ 25-basis-point rate cut this month.
• Traders await delayed US economic data after the government's reopening, seeking clearer signals on Fed policy.

NZD/USD gained for the second successive session, trading around 0.5680 during the European hours on Monday. The New Zealand Dollar (NZD)after US President Donald Trump on Friday lifted tariffs on New Zealand exports worth about NZ$2.21 billion ($1.25 billion) annually. On Sunday, New Zealand welcomed the US decision but said it hopes all remaining additional tariffs on its goods will also be lifted.

However, the NZD may face challenges as weaker economic data reinforced expectations of an imminent 25-basis-point rate cut from the Reserve Bank of New Zealand (RBNZ) later this month. New Zealand's Business NZ Performance of Services Index (PSI) rose to 48.7 in October from 48.3 in September, but remained stuck in contraction for 20 straight months and stayed well below the long-term average of 52.8. Food Price Index declined 0.3% month-over-month (MoM) in October, against September's 0.4% decline.

However, the upside of the NZD/USD pair as the US Dollar (USD) gains amid diminishing likelihood of a Federal Reserve (Fed) interest rate cut in December. Traders are preparing for a wave of delayed United States (US) economic data after the government's reopening, looking for clearer signals on Fed policy.

The CME FedWatch Tool suggests that financial markets are now pricing in a 46% chance that the Fed will cut its benchmark overnight borrowing rate by 25 basis points (bps) at its December meeting, down from the 67% probability that markets priced a week ago.