Ella 
NZD/USD encountered fresh selling on Thursday and reversed most of the previous day’s gains to a one-week high in the 0.5985 area. Spot prices hit a low of the day around 0.5950 in early European trade and now appear to have halted this week’s rally to its lowest level since November 2022.
A key factor weighing on NZD/USD is the U.S. dollar index, which has rebounded sharply from a more than two-month high on Wednesday. Against the backdrop of deteriorating economic conditions in China, a raft of manufacturing surveys on Wednesday pointed to a gloomy outlook for the global economy, stoking fears of a global downturn and prompting some safe-haven flows to the dollar.
Meanwhile, latest U.S. PMI data showed business activity in the world’s largest economy neared a standstill in August, dampening expectations for further rate hikes by the Federal Reserve and dragging the benchmark 10-year U.S. Treasury yield away from 16-year highs point. In addition, signs of de-escalation surrounding the U.S.-China trade conflict may limit the dollar’s gains and provide support for the commodity currency kiwi.
Traders may also refrain from building aggressive positions, preferring to wait and see ahead of the Jackson Hole annual meeting, when Fed Chairman Jerome Powell’s speech will be watched for clues on the path of future rate hikes. This will affect the greenback and give NZD/USD a fresh boost. Meanwhile, traders on Thursday will focus on U.S. economic data, including last week’s jobless claims and durable goods orders data, which will offer short-term opportunities.
