NZD/USD extends the losing streak toward 0.5850, US Services PMI eyed

• NZD/USD trades lower around 0.5860 due to firmer US Dollar (USD).
• Upbeat US Treasury yields underpin the strength of the Greenback.
• China’s downbeat economic data weighed on the Kiwi pair.

NZD/USD trades lower around 0.5860 during the Asian session on Wednesday, continuing the losing streak that began on Friday. The pair is under pressure due to the firmer US Dollar (USD) as the market participants seem to accept the less likelihood of an interest rate hike by the US Federal Reserve (Fed) in September’s policy meeting.

According to the CME FedWatch Tool, the probability is 93% of an interest rate remaining unchanged. Further, Fed Governor Christopher Waller mentioned to CNBC that the interest rate decision would be contingent on the data. Waller's statement about the data pointing toward a promising soft-landing scenario has contributed to the strengthening of the US Dollar (USD).

US Dollar Index (DXY), which compares the Greenback against six other major currencies, trades higher around 104.90 at the time of writing. The upbeat yields on US Treasury bonds bolster the buck to continue gaining its strength. The 10-year US Treasury yield rose to 4.26%, up by 1.85%.

United States (US) Factory Orders for July plummeted to their lowest levels since mid-2020, with a decline of -2.1%, far below the market expectations of -0.1% figure, and swinging from the 2.3% growth seen in the previous month.

On Tuesday, China’s downbeat Caixin Services PMI weakened the market optimism and weighed on the NZD/USD pair. China's services sector experienced its slowest growth in eight months. The data showed a decline from 54.1 in July to 51.8 in August.

Market participants will likely monitor the upcoming data scheduled to be released later in the day. These datasets include US ISM Services PMI for August and US S&P Global PMIs are due. These releases will offer insights into the US economic scenario.