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  • US Dollar Index rebounds above 96.60 on Thursday.
  • Disappointing PMI data from China weighs on NZD.
  • Weekly Jobless Claims and Markit Manufacturing PMI will be featured in US economic docket.

The NZD/USD pair climbed higher after Christmas break supported by the broad-based USD weakness and ended the year at its highest level since July at 0.6738. With year-end flows’ impact on the markets fading away at the start of the new year, the pair retreated to 0.6700 area and was last seen erasing 0.3% on a daily basis.

Earlier in the day, the Caixin Manufacturing PMI fell to 51.5 in December’s final reading and fell short of the market expectation of 51.7 to weigh on the China-proxy NZD. In the meantime, the People’s Bank of China (PBOC) has announced a 50 basis point cut to its Reserve Requirement Ration (RRR) with an aim to boost the economic recovery and helped the NZD limit its losses for the time being.

USD rebounds ahead of PMI data FOMC minutes

On the other hand, after erasing more than 1% during the last week of December, the US Dollar Index reversed its direction and was last up 0.22% on the day at 96.66. Later in the session, the weekly Jobless Claims data and the IHS Markit’s Manufacturing PMI reading will be looked upon for fresh impetus.

There won’t be any macroeconomic data releases featured from New Zealand or China on Friday. In the second half of the day, the ISM Manufacturing PMI data and the Federal Open Market Committee’s December meeting minutes from the US will be watched closely by participants.

Technical levels to watch for