Ella 
During the Asian session on Wednesday, NZD/USD traded lower near 0.5860, continuing the losing streak since last Friday. NZD/USD was pressured by a firmer greenback as market participants appeared to accept that the Fed’s September policy meeting saw little prospect of a rate hike.
The CME FedWatch tool puts the probability of the Fed on hold at 93%. Additionally, Fed Governor Christopher Waller mentioned to CNBC that the rate decision will be data dependent. In his speech, Waller noted that the U.S. dollar (USD) strengthened as economic data pointed to the prospect of a soft landing for the economy.
The U.S. dollar index (DXY), a measure that compares the U.S. dollar against six other major currencies, was trading higher around 104.90 at press time. Rising U.S. bond yields supported continued dollar strength. The 10-year U.S. Treasury yield rose to 4.26%, up 1.85%.
U.S. factory orders fell sharply in July to the lowest level since mid-2020, falling by -2.1%, well below market expectations of -0.1% and a fluctuation from the previous value of 2.3%.
China’s Caixin Services Purchasing Managers’ Index (PMI) was weak on Tuesday, dampening market optimism and weighing on the NZD/USD currency pair. China’s Caixin Services Purchasing Managers’ Index recorded its slowest growth in eight months. Data showed that China’s Caixin services purchasing managers’ index fell to 51.8 in August from the previous reading of 54.1.
Market participants are likely to focus on upcoming data later in the day. These data include the US ISM Services Purchasing Managers Index in August and the US S&P Global Purchasing Managers Index. These data will provide signals about the US economic situation.
