NZD/USD gains ground to near 0.5900 ahead of Chinese PMI releases

• NZD/USD strengthens to near 0.5900 in Thursday's early Asian session. 
• The Fed held rates steady for the fifth straight time on Wednesday.
• Traders brace for China's July NBS PMI reports for fresh impetus, which are due later on Thursday. 

The NZD/USD pair gathers strength to around 0.5900, snapping the five-day losing streak during the early Asian session on Thursday. The US Dollar (NZD) weakens against the New Zealand Dollar (NZD) after the Federal Reserve (Fed) decided to keep rates unchanged. Later on Thursday, China's National Bureau of Statistics (NBS) Manufacturing PMI and Services PMI will be in the spotlight. 

The Federal Open Market Committee (FOMC) voted 9-2 to hold its benchmark federal funds rate in a range of 4.25%-4.5% at its July meeting on Wednesday. Governors Christopher Waller and Michelle Bowman voted against the decision in favor of a 25 basis points (bps) rate cut.

Fed Chair Jerome Powell said during the press conference that interest rates are in the right place to manage continued uncertainty around tariffs and inflation, tempering expectations for a rate cut in September. Markets are now pricing in nearly a 60% chance of a Fed rate reduction at the next meeting in September, down from about 60% earlier in the day, according to the CME FedWatch tool. 

Meanwhile, trade optimism and a possible extension of the US-China trade truce could provide some support to the China-proxy New Zealand Dollar (NZD) in the near term, as China is a major trading partner of New Zealand. US Treasury Secretary Scott Bessent said that the US and China will continue talks over maintaining a tariff truce before the deadline in two weeks, and Trump will make the final decision on any extension. Bessent tamped down any expectation of Trump rejecting the extension.