Talking Points:
New Zealand Dollar implied volatility is the most elevated of its major counterparts The currency faces US CPI, FOMC[1] minutes and a speech from RBNZ’s McDermott NZD/USD[2] could be heading higher and it faces a critical resistance line from 2017 Build confidence in your own NZD/USD strategy[3] with the help of our free guide! The New Zealand Dollar is priced in for what could be intense price action in the near-term, and NZD/USD could soon face a critical resistance level. One-day implied volatility for the pair stands at 11.86% which is not only the highest of the majors, but it is also near a two-month high. The similar one-week reading is also the most elevated of the majors. Let’s take a look at what could drive price action. Implied Volatility and Market Range for the FX Majors
Lately, the New Zealand Dollar has been left vulnerable to swings in sentiment as trade war fears waxed and waned. On Tuesday though there was a major break, both the Chinese and US president gave off relatively positive vibes for ongoing trade developments[4]. Stocks rose and sentiment-linked currencies followed. As the threat of a trade war diminished on Tuesday, the NZ Dollar finds itself facing Wednesday’s economic calendar schedule. On April 11th, we will get two top-tier US economic events. The first one is March’s US CPI report. The headline inflation rate is expected to tick up to 2.4% y/y from 2.2% while the core measurement climbs to 2.1% from 1.8%. Then, we will get the FOMC meeting minutes from Fed’s March rate hike. Both may have an
