Forex Markets Brace for Volatility as Central Banks Take Center Stage
NZD/USD, USD/JPY, and AUD/USD are among the most volatile currency pairs this week, driven by central bank decisions, inflation data, and shifting carry trade dynamics.
The Bank of America has recommended buying NZD/USD, citing expectations of RBNZ rate hikes and technical buy signals. Meanwhile, the 10-year JGB yield hit a 30-year high (+87% YoY), putting pressure on the Bank of Japan to defend the yen through intervention.
AUD/USD is also gaining ground, supported by strong technical buy signals and robust demand for Australian dollar bonds. The RBA's hawkish stance and global capital flows are adding to its upside momentum.