NZD/USD is trading in positive territory around 0.5865 during the Asian session on Tuesday. The New Zealand dollar (NZD) strengthened against the U.S. dollar (USD) as the United States and China announced a trade deal, easing concerns about a trade war between the world's two largest economies. Traders will be watching the U.S. Consumer Price Index (CPI) report for April, due later on Tuesday.

U.S. President Donald Trump heralded a "total reset" in relations between the United States and China as the two countries agreed to suspend tariffs for 90 days and reduce reciprocal tariffs by 115 basis points. Through the 115 basis point reduction, China’s tariffs on U.S. goods will fall to 10%, while the U.S. tariff rate on Chinese goods will fall to 30%. These positive developments provided some support to the New Zealand dollar, which is priced in China, as China is an important trading partner of New Zealand.

On the other hand, the easing of trade tensions between the world's two largest economies gave investors a clear signal that the Trump administration was taking a more dovish approach than expected, raising hopes that the U.S. economy could avoid a recession. This could boost the US dollar (USD) and create resistance for the pair.

Swap markets have priced in the Fed’s first 25 basis point (bps) rate cut at its September meeting and are pricing in two more rate cuts before the end of the year. Last week, they signaled they would cut rates three times this year, with an adjustment possible as early as July.