The pound lost ground yesterday as demand for the kiwi soured on positive data and rising risk appetite

Sterling slid over three cents, or 1.5%, against the kiwi yesterday with improved risk appetite favouring higher-yielding currencies.

  • Data released in New Zealand showed house prices in the country rose for the first time in 16 months, adding support to the kiwi dollar.
  • In addition, growing optimism about the state of the Chinese economy, with a raft of economic data being released on Wednesday morning, supported demand for commodity-linked currencies such as the kiwi.
  • Investors are pricing in positive economic figures from China tomorrow, underscoring the strength of the global recovery and supporting demand for higher-risk assets.
  • In trading so far today, the pound has resumed its slide against the New Zealand currency after news Britain’s AAA sovereign credit rating may be under threat.