Never miss a story from Justin McQueen

Subscribe to receive daily updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from DailyFX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to Justin McQueen

You can manage your subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

Currency Volatility NZD Talking Points

  • NZDUSD Volatility Surges to Highest Since September 2016
  • NZDUSD Overnight implied move 58pips

Top 10 most volatile currency pairs and how to trade them

For a more in-depth analysis on FX, check out the Q2 FX Forecast

Currency Volatility: New Zealand Volatility Skyrockets as Investors Eye RBNZ

Source: DailyFX

Currency Volatility: New Zealand Volatility Skyrockets as Investors Eye RBNZ

Source: Thomson Reuters, DailyFX

NZDUSD | Daily Range (0.6540 – 0.6650)

As highlighted in the weekly volatility report (full story) deteriorating data has fuelled expectations of a rate cut from the RBNZ, which in turn has kept the New Zealand Dollar under pressure. As it stands, overnight index swaps are pricing in a 40% chance of a 25bps cut at today’s meeting, as opposed to 60% on Friday with the RBA’s decision to stand pat seeing a pullback in rate cut bets. In light of the knife-edge rate decision, overnight implied volatility has jumped to the highest level since September 2016, whereby demand for NZD put options are highest since September 2018. However, the break-even for NZDUSD is only 58pips.

If indeed the RBNZ were to lower interest rates this would undoubtfully see the NZD initially under pressure. However, much like the RBA, a decision to stand pat on rates could see a short squeeze provide support for the currency, although with the rate decision expected to be accompanied with a dovish statement (opening room for a cut) an initial short squeeze bid could be subsequently faded. As a reminder, RBNZ Governor Orr highlighted on April 25th (after inflation data but before jobs data) that the NZ economy was “in a pretty good spot”, while the NZ Shadow Board had also reiterated no recommended changes, thus there is a risk of no change at the rate decision.


--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at

Follow Justin on Twitter @JMcQueenFX