NZD/USD holds onto gains near 0.5950 as US Dollar’s rally hits pause

The NZD/USD pair clings to Wednesday’s gains near 0.5950 during the Asian trading session on Thursday. The Kiwi pair shows strength as the US Dollar’s (USD) rally hits a pause, with the US Dollar Index (DXY) struggling to extend gains above the fresh three-month high of 99.68 posted on Tuesday.

The US Dollar came under pressure after a report from the New York Times (NYT) signaled that Iran has expressed willingness for talks with the United States (US) about ending the war, which has entered its sixth day.

Operatives from Iran’s Ministry of Intelligence reached out indirectly to the Central Intelligence Agency (CIA) with an offer to discuss terms for ending the conflict, according to officials briefed on the outreach, NYT reported.

However, Tehran has denied these reports and has stated that it will continue the war with Israel and the US.

Also, the strength in precious metals indicates that global financial markets are still far from turning risk-on.

On the domestic front, improving US labor market conditions are expected to weigh on dovish Federal Reserve (Fed) prospects. The data showed on Wednesday that the US private sector created 63K fresh jobs in February, significantly higher than 50K estimates and the prior reading of 11K.

For more cues on the current state of the US employment, investors will focus on the Nonfarm Payrolls (NFP) data for February, which will be released on Friday.

Meanwhile, the New Zealand Dollar (NZD) trades broadly flat as investors seek fresh cues on the Reserve Bank of New Zealand’s (RBNZ) monetary policy outlook.