NZD/USD trades with positive bias near 0.6075-0.6080 area amid modest USD downtick

• NZD/USD regains positive traction as the post-NFP USD rally fades rather quickly.

• US fiscal concerns and a positive risk tone seem to undermine the safe-haven buck.

• The focus now shifts to Chinese inflation data and the RBNZ meeting next Wednesday.

The NZD/USD pair builds on the overnight bounce from the 0.6030 region, or the weekly trough, and gains some follow-through positive traction on Friday. Spot prices climb to the 0.6080 area during the early European session and for now, seem to have snapped a two-day losing streak amid a modest US Dollar (USD) weakness.

Traders dialled back expectations that the Federal Reserve (Fed) will cut interest rates in July following the release of stronger-than-expected US jobs data on Thursday. The initial market reaction, however, turns out to be short-lived amid concerns that US President Donald Trump's tax-cut and spending bill would further worsen America’s long-term debt problems. This, in turn, keeps the USD bulls on the defensive and acts as a tailwind for the NZD/USD pair.

Apart from this, the upbeat market mood is seen as another factor undermining the Greenback's relative safe-haven status and benefiting the risk-sensitive Kiwi. Meanwhile, the NZD/USD pair remains on track to register gains for the second straight week, though the uncertainty over Trump's trade policies could cap any further gains. Traders might also refrain from placing aggressive bets amid relatively thin trading volumes on the back of a US holiday.

The market focus now shifts to the release of Chinese inflation figures and the Reserve Bank of New Zealand (RBNZ) meeting next Wednesday, which will drive the New Zealand Dollar (NZD) and provide a fresh impetus to the NZD/USD pair. Nevertheless, the aforementioned fundamental backdrop seems tilted in favor of the USD bears and suggests that the path of least resistance for the currency pair remains to the upside.