Sterling edged higher against the kiwi in trading yesterday, supported by solid data from the services sector to close the day up at 2.2834.
- The pound made marginal gains after a survey of purchasing managers indicated the UK’s dominant services sector saw activity rise at its fastest pace in more than two years.
- The data, which exceeded market expectations, followed on from positive manufacturing data earlier in the week and reaffirmed hopes that the UK economic recovery is not stalling.
- In trading this morning, the pound has backed off slightly in anticipation of the BoE’s interest rate decision, which analysts are suggesting is likely to cause volatility if the members disagree over the level of quantitative easing that is necessary.
- In addition, the New Zealand currency has benefited from the US interest rate statement last night, which confirmed that US rates would be low for some time, encouraging investors to continue using the carry trade to invest in higher-yield currencies.
- Currently the pound is climbing higher, hovering just below 2.2300 against the kiwi, as positive manufacturing data boosts demand for the UK currency.
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