The pound was broadly sold on Friday following a weak GDP figure, losing three cents to the kiwi dollar, to close back down at 2.1607.
- Data revealed that Britain’s economy has now shrunk for six quarters after it contracted by 0.4% in the most recent quarter, the longest period of contraction since records began in 1955.
- Analysts have now renewed their discussion over the possibility of the Bank of England retaining, or even extending, its £175 billion QE programme, which would compound sterling’s weakness.
- The news also confirmed that the BoE are likely to keep the benchmark interest rate at a record low of 0.5% firmly into 2010, lessening the appeal of sterling assets.
- In response, the markets took the kiwi nearer its multi-year highs hit earlier this month, and this trend has continued in trading this morning as investors continue to take their lead from Friday’s data.
Related posts:
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- Sterling has resumed its recent upward trend against the kiwi, buoyed by brief market selling in high-yielders and by the MPC minutes
- Sterling made gains against the kiwi yesterday, but rising risk appetite has supported kiwi advances today
- The kiwi dollar has risen sharply following a positive business survey and the RBA rate increase
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