NZD/USD fell below 0.60 but has bounced. The pair may have formed a base but economists at ANZ Bank expect more volatility ahead.

FX markets remain focussed on the Fed and global factors

“Once again there was nothing NZ-specific about the move, and that’s the way it feels like it’s going to be for a while as global FX markets digest significant themes (restated Fed hawkishness, the far-reaching consequences of surging energy costs, debates over how sticky inflation is, and climate change – to name a few). 

“Technically, the textbook bounce in the NZD off 0.60 (it fell below it briefly, but it wasn’t sustained) is a positive sign for those of that ilk, and if the global market backdrop doesn’t deteriorate, it may have formed a base. But that can’t be assured, and it makes sense to brace for volatility.”