The NZD/USD currency pair went up in the early European session because of buying on Thursday. The pair stays around 0.6350, just a few pips below Tuesday’s weekly high. This is because the US dollar is getting weaker.

The uncertainty about when the Federal Reserve will raise rates hurts the greenback’s move to a one-month high after the non-farm payrolls. This helps the NZD/USD pair. Also, a return to risk-taking around the world, as shown by the generally bullish tone around US market futures, makes the safe-haven dollar lose value and the risk-sensitive pair gain value.

Even though it seems less likely that the Fed will stop tightening the policy, the buck’s fall seems limited. On Tuesday, several Federal Open Market Committee (FOMC) members agreed with Fed Chair Jerome Powell that more rate hikes were needed to keep inflation in check. This could make NZD/USD bulls less likely to bet aggressively.

Fears of a recession should limit market optimism, boosting demand for the dollar and putting a ceiling on the NZD/USD pair. Investors are worried about the COVID-19 pandemic and rising interest rates. This and worries about how the US and China will get along may make people feel down.

Conclusion

The bigger picture suggests that the recent drop of the NZD/USD pair from its highest level since June 2022 should be followed by more buying. The major could get a boost from the US Weekly Initial Jobless Claims report and how people feel about taking risks.