With the trade tensions dominating market attention, New Zealand would continue to take a back seat. The major New Zealand data was the results of the GlobalDairyTrade auction early this morning.
The escalating tensions between the United States and China remained a key theme in foreign exchange markets last week.
Fears trade tensions could materially escalate and weigh on global trade and economic growth resulted in investment flowing back into safe haven assets, supporting the US dollar and Japanese yen, he said.
China said it would impose tariffs of up to 25% on a list of 128 products imported from the US in response to US President Donald Trump's tariffs on steel and
aluminium imports.
US stocks tumbled amid trade war concerns and after Mr Trump tweeted that Amazon had an unfair market advantage versus US bricks and mortar retailers.
White House trade adviser Peter Navarro said he did not see the US and China responding to each other's tariff moves in a tit-for-tat escalation of trade
tensions.
Asked on CNBC television what the US response should be to combat China's tariffs on $US3billion ($NZ4.2billion) worth of US fruits, nuts, wine, frozen pork, steel pipe and aluminum scrap, Mr Navarro said: "I don't think this is going to be an action-response, action-response. That's not what this should be about. That just leads to escalation spirals."
He said Mr Trump was firmly committed to a course of action that would level the trade playing field between the two countries.
Mr Tuffley said in addition to trade tension fears, the US dollar was also likely to receive support from Friday's US March employment report.
Leading employment indicators pointed to an above-average increase in US non-farm payrolls.
"Importantly, business and consumer surveys of future compensation suggest risk to average hourly earnings growth are skewed to the upside. If this upside risk to US wage growth materialises, it would bode well for the US dollar in the near term."
New Zealand interest rates had followed global counterparts lower. There were signs of stresses in credit markets and the question marks over the pending impact of higher US interest rates provided a risk tone to markets, Mr Tuffley said.
Recent data had largely been ignored by markets. Market pricing in New Zealand dollar and offshore markets had been pared back.
During the week, US 10-year treasury yields touched two-month lows. The 10-year yield was sitting at 2.73%.
The ASB believed the Reserve Bank would start lifting the official cash rate from September next year.
"We expect a moderate pace of tightening by historical standards and a low OCR end point of about 3.5% this cycle."
The US Federal Reserve was expected to lift interest rates five times by the end of 2019 - two more this year and two next.
Local wholesale interest rate yields should continue to outperform US comparisons, Mr
Tuffley said.
