The kiwi advanced over three and a half cents (1.6%) against the pound yesterday as investors showed renewed enthusiasm for risky assets.
- Rising commodity-prices and stronger-than-expected corporate earnings in the US have contributed to continued demand for higher-yielding currencies.
- In addition, investors are now pricing in that New Zealand’s central bank is likely to drop its monetary- easing bias at its meeting next week as economic data point to improvement.
- Although there has been speculation that the RBNZ has expressed concern that the strength of the kiwi is frustrating economic recovery, strong data has investors questioning whether the central bank can keep interest rates on hold until the middle of next year.
- In trading this morning, the New Zealand dollar has capped its gains, with the price currently hovering just above 2.17.
Related posts:
- Sterling has picked itself up from multi-year lows against the kiwi, buoyed by improving economic sentiment
- Kiwi found support from the strength of its neighbour yesterday, and as global equities rallied strongly
- Bearish sentiment towards the pound on Friday allowed the kiwi to make substantial gains
- Positive economic data from NZ, keeps the kiwi rallying higher vs sterling
- Demand for the kiwi remained strong yesterday, but it has lost ground in the wake of comments from Ben Bernanke
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