In a poor day for the kiwi dollar, the pound rose by over seven cents, or 3.1%, against the kiwi, reaching a one-month high as traders withdrew long positions.
- A slide on Wall Street and on European share indices, led by declines in the energy and banking sectors, accelerated a sharp fall in the “riskier” kiwi dollar.
- This was compounded after data revealed an unexpected fall in US new home sales for September, which, as general sentiment was that the housing sector was on the mend, raised concerns in the market, sapping demand for the kiwi.
- The New Zealand currency was further undermined in the evening, diving two cents, after the central bank dampened expectations of an early rate rise.
- The RBNZ left rates on hold at 2.50% as expected and moved to a neutral bias. But it added in its statement that it expected to leave rates on hold until the second half of 2010, against expectations of a rise later this year.
- In trading this morning, the kiwi has pulled back slightly, though the price remains up around 2.2650.