On Wednesday, strong bids helped the NZD/USD pair get back up from 0.6130, its lowest level since November 23. Early in the European session, spot prices hit a new weekly high near the 0.6240-0.6250 supply zone. This is because the strong intraday rise is still going on.

Chinese business activity returned to before COVID, which boosted demand for currencies from places like New Zealand. China’s official Manufacturing PMI reached 52.6% in February, the highest level since April 2012. The non-manufacturing gauge hit 56.3 in February, the highest level since June 2022.

As the world’s second-largest economy improves, more people are willing to take risks. The risk-averse Kiwi gets a boost, while the safe-haven US Dollar gets hurt. But worries about a recession and bold predictions from the Fed could make people less optimistic and put pressure on the NZD/USD pair.

Now, the markets think that the US central bank needs to keep raising interest rates to keep inflation from getting out of hand. Higher yields on US Treasury bonds help people who like the dollar. Before making more bullish bets, strong follow-through buying is needed to show that the NZD/USD pair has hit a bottom of around 0.6135-0.6130.

Trade Idea

Traders are waiting for the US economic calendar, which includes the ISM Manufacturing PMI report, which comes out early in the North American session. This, along with US bond yields and how people feel about taking risks, will affect how the USD price moves and create short-term trading opportunities for the NZD/USD.