• NZD/USD faces challenges due to deflation concerns in China.
• The Kiwi Dollar receives downward pressure from safe-haven flows amid escalating geopolitical tensions.
• The Business NZ PSI came in at 45.7 for September, slightly better than the previous 45.5 reading.

NZD/USD depreciates after registering gains in the previous two sessions, trading around 0.6090 during the Asian trading hours on Monday. The New Zealand Dollar (NZD) receives downward pressure from the deflation fears in its largest trading partner China. Additionally, uncertainty surrounding Beijing's economic stimulus plans, which has raised concerns about the country’s demand undermines the Kiwi Dollar. Traders await Monday’s Trade Balance data from China for further impetus on the economic situation.

On Sunday, the National Bureau of Statistics of China reported that the country's monthly Consumer Price Index (CPI) held steady at 0% in September, against August’s increase of 0.4%. The annual inflation rate rose by 0.4%, falling short of the expected 0.6%. Meanwhile, the Producer Price Index (PPI) experienced a year-on-year decline of 2.8%, a larger drop than the previous decrease of 1.8% and surpassing expectations of a 2.5% decline.

The National People’s Congress expressed optimism after a briefing from China's Ministry of Finance (MoF) on Saturday. The ministry suggested plans to issue special bonds to support bank recapitalization and stabilize the real estate sector, although no specific figures were disclosed.

The risk-sensitive NZD/USD pair may have received downward pressure due to safe-haven flows amid rising geopolitical tensions. China's military initiated drills in the Taiwan Strait and around Taiwan on Monday. A spokesperson for the US Department of State expressed serious concern regarding the People's Liberation Army's (PLA) military actions.