1. Combine sugar, orange juice, fennel seeds, star anise, and 3 cups water in a medium saucepan. Bring to a simmer over medium-high, stirring until sugar is dissolved (if it begins to boil, reduce heat -- boiling will make the syrup cloudy). Remove from heat; stir in orange zest. Let steep 1 hour.

2. Strain through a fine-mesh sieve into a large liquid-measuring cup; discard solids. Refrigerate until completely cool, 1 hour. Pour into gift bottles, adding orange peel, if desired. Syrup can be stored in bottles, refrigerated, up to 1 month.