NZD/USD trades at fresh weekly highs near 0.6330

• US Dollar Index slumps to 97 on additional rate cut expectations. 
• Risk aversion caps pair's gains for the time being.
• Coming up: Unit Labor Costs, Weekly Jobless Claims, Factory Orders from US.

The NZD/USD pair extended its rebound for the fourth straight day on Thursday after slumping to a fresh multi-year low of 0.6178 at the start of the week. As of writing, the pair was up 0.38% on the day at 0.6320, a little below the weekly high that it set at 0.6334 earlier in the session.

DXY turns south on Thursday 

The broad-based USD weakness seems to be helping the pair push higher on Thursday. The Federal Reserve's emergency rate cut on Tuesday failed to trigger a long-lasting recovery in the US Treasury bond yields. With the yield on the 10-year reference losing more than 7%, the US Dollar Index (DXY) is testing the 97 handle ahead of the American session.

In the meantime, the sharp drop in the yields causes markets to price an additional cut at the Federal Reserve's March 17-18 meeting. According to the CME Group FedWatch tool, there is now a 60% chance for a 25 basis points rate cut.

Later in the day, Unit Labor Costs and Nonfarm Productivity data for the fourth quarter will be featured in the US economic docket alongside the weekly Jobless Claims and Factory orders figures. However, unless there is a convincing rebound in the Treasury bond yields, the US Dollar Index is likely to remain vulnerable.

Technical levels to watch for