NZD/USD edges lower to near 0.5950 as US-China tariff truce deadline looms

• NZD/USD declines to around 0.5950 in Monday's early Asian session, losing 0.16% on the day.
• China's consumer prices held steady in July, while producer prices extended a 34-month deflation streak. 
• Lutnick said a 90-day extension of a US-China tariff truce is likely. 

The NZD/USD pair loses ground to near 0.5950 during the early Asian session on Monday. The New Zealand Dollar (NZD) softens against the US Dollar (USD) as China's deflation fears linger. Traders will keep an eye on the US-China trade talks and await the release of the US July Consumer Price Index (CPI) inflation data. 

China's Consumer Price Index (CPI) was unchanged in July from a year earlier, the National Bureau of Statistics said Saturday. The figure followed a 0.1% increase seen in June and came in below the consensus of a 0.1% decline. Inflation ended a four-month falling streak in June, turning positive. Additionally, factory deflation persisted for 34 consecutive months, with the Producer Price Index (PPI) falling 3.6%, matching June's decline.

Traders will closely monitor the developments surrounding the US-China tariff truce as the deadline looms. US Commerce Secretary Howard Lutnick said on Thursday that it's likely that US President Donald Trump would extend the trade deadline by another 90 days. 

Meanwhile, US Trade Representative Jamieson Greer stated that the world's two largest economies were "working towards" an extension. Any positive developments could help limit China's proxy Kiwi's losses, as China is a major trading partner of New Zealand. 

The US inflation report for July will be in the spotlight later on Tuesday. The CPI is expected to show an increase of 2.8% YoY in July, while the core CPI is projected to show a rise of 3.0% in the same report period. Any signs of softer US inflation could prompt the Federal Reserve (Fed) to cut its rate this year and exert some selling pressure on the Greenback.