• NZD/USD draws support from a modest US weakness and a positive risk tone. 
• Fed rate cut uncertainty should limit the USD losses and cap gains for the pair.
• China’s economic woes further warrant caution for aggressive bullish traders. 

The NZD/USD pair attracts some dip-buying during the Asian session on Monday and looks to build on Friday's modest bounce from the vicinity of mid-0.6000s, or its lowest level since mid-May touched on Friday. Spot prices currently trade around the 0.6100 mark amid a modest US Dollar (USD) weakness, though lack bullish conviction amid the uncertainty over the Federal Reserve's (Fed) rate-cut path. 

The US Personal Consumption Expenditures (PCE) Price Index released on Friday confirmed the disinflationary trend as shown by the Consumer Price Index (CPI) and Producer Price Index (PPI) for May. The data reaffirmed market bets that the Fed will start cutting interest rates at the September policy meeting, which keeps the USD bulls on the defensive. Apart from this, a positive tone around the US equity futures undermines the safe-haven buck and lends support to the NZD/USD pair. 

That said, the Fed adopted a more hawkish stance at the end of the June policy meeting and forecasted only one interest rate cut in 2024. Furthermore, President Joe Biden's disastrous debate with his Republican opponent increased the odds of a Trump presidency. This, in turn, fueled worries that the imposition of aggressive tariffs by the Trump administration could fuel inflation and trigger higher rates, which remains supportive of elevated US Treasury bond yields and should limit the USD losses.