Ella 
NZD/USD attracted some buyers during Thursday’s Asian session and now appears to have halted the previous day’s losses from the 0.6175 area or two-week high. Spot prices are currently trading around the 0.6130-0.6135 range and despite the lack of follow-through buying, caution should be exercised before betting on further gains.
A private sector survey released earlier today showed factory activity in China increased steadily for a third straight month in January. Indeed, China’s Caixin Manufacturing Purchasing Managers’ Index (PMI) for January was 50.8, unchanged from the previous month and better than market expectations for a decline to 50.6. This, in turn, provided a modest boost to commodity currencies, including the NZD, which, coupled with subdued US dollar (USD) price action, was bullish for NZD/USD.
However, this optimism may remain limited due to China’s sluggish economic recovery. Additionally, the Federal Reserve’s less dovish outlook on Wednesday went against market expectations for a rate cut in March, helping the dollar stand near its highest level since Dec. 13. Beyond this, geopolitical risks should favor the green card’s relative safe-haven status and further dampen any further upside for NZD/USD.
Traders now turn their attention to the U.S. economic calendar, which includes the usual weekly jobless claims data and the ISM Manufacturing Purchasing Managers’ Index. These data, along with broader risk sentiment, could influence USD price dynamics and provide some momentum for NZD/USD. However, the focus will remain on the closely watched monthly U.S. employment data, Friday’s non-farm payrolls report (NFP).
