The kiwi dollar struggled on Friday enabling the pound to jump 1.4%, briefly nearing the 2.30 level, as risk appetite in the market waned.
- Higher-risk currencies struggled to make headway at the end of last week as the rally in global equities in the wake of the positive US GDP data came to an abrupt halt.
- As global stocks fell, investors sought shelter in the haven currencies fuelling a sell-off in the higher-yielding kiwi dollar, buoying the sterling price.
- In trading this morning, the New Zealand dollar has pulled back from six-week lows against the pound, with profit taking in high-yield currencies taking a pause.
- Support has also come from improved manufacturing data in China, a key importer of New Zealand goods, which has outweighed some of the negative sentiment toward the currency.
- Analysts have noted though that reduced support for a rise in interest rates and lower risk appetite may prevent the kiwi from regaining its strong valuation.
Related posts:
- A rise in risk aversion weighed on the pound on Friday, supporting dollar gains
- Demand for the kiwi remained strong yesterday, but it has lost ground in the wake of comments from Ben Bernanke
- Sterling traded strongly at the end of last week against the kiwi but has slipped back sharply this morning
- Sterling made gains against the kiwi yesterday, but rising risk appetite has supported kiwi advances today
- Kiwi strenghtened broadly yesterday, but the pound has stemmed its losses in trading this morning
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