The kiwi dollar came under pressure yesterday following dovish comments from the PM, enabling the pound climb two and a half cents, closing at 2.1845. The kiwi dollar underperformed after the country’s Prime Minister John Key said New Zealand is concerned over the strength of its currency, but has few tools at its disposal to deal with it. The statement concerned investors as it lessened the chance of the RBNZ raising interest rates in the near future as some traders were expecting. In trading this morning the pair are trading steadily around last night’s closing price, with investors now turning their focus the NZ interest rate decision on Wednesday evening.
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Kiwi struggled as the PM highlighted the problems inherent with a strong currency
Posted by admin on October 27th, 2009
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Sterling made gains against the aussie as the price of gold fell back
Posted by admin on October 27th, 2009
The pound posted gains against the aussie yesterday, reversing its steep fall at the end of last week as investors cashed profits, closing up 0.8% at 1.7822. The aussie was broadly weaker in trading yesterday as investors took the opportunity to take profits following sharp gains made on Friday.The price of gold also continued to fall yesterday, discouraging investment in the commodity linked currency. Gold quoted around 1053/oz yesterday, though probably due more to profit taking than lack of strength.In trading this morning, the aussie is slightly up on the day, though investors are likely to remain wary ahead of sales data in the UK and a consumer confidence survey in the USIn addition, investors may well caution against long positions ahead of Thursday when the US 3 rd quarter GDP figure is released. The economy is forecast to have grown by 3.3% in the quarter, though if it undershoots this target it could trigger a wave of selling in riskier currencies.
Sterling is rebounding against a broadly weaker dollar
Posted by admin on October 27th, 2009
Further doubts over the dollar’s reserve status stoked selling in the US currency yesterday, enabling the pound to recover some of Friday’s heavy losses. The greenback lost ground broadly after an article stated that the People’s Bank of China may be considering raising the share of the euro and the yen in its foreign exchange reserves, though the dollar should still remain dominant.However it was later revealed that the article was merely the author’s “point of view,” which capped sterling’s gains, as investors checked their dollar selling.In addition, the pound found support as declines at the end of last week were seen by some investors as over-stretched, suggesting that the market has oversold sterling.However, as the US markets came online, global stocks took a dive into the red, enabling the haven currency to trim its losses.Analysts noted that given the huge amount of bearish trades on the dollar in recent weeks, a near-term dollar recovery could be on the horizon. In trading today, investors will be looking for direction from sales data in the UK, released at 11:00, and a consumer confidence survey in the US, released at 14:00.
Sterling halted its recent rally and is slipping back sharply against the kiwi as UK GDP figure disappoints
Posted by admin on October 26th, 2009
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.
UK economy contracted by 0.4%, which has and will continue to weigh heavily on sterling
Posted by admin on October 26th, 2009
In an uncertain day for the UK economy, the pound lost as much as 2.0% to the euro on Friday, sharply reversing its recent rally to close down at 1.0862. Data revealed that the UK economy unexpectedly contracted by 0.4% between July and September this year, confirming that the UK is still in recession. Quarterly growth of 0.2% had been expected, although expectations had been tempered by recent figures showing no growth in retail sales in September and a 2.5% decline in industrial output in August. Importantly, the disappointing GDP figures may now lead the Bank of England to consider the possibility of extending their asset purchase scheme in their November meeting in order to sustain the evidently fragile recovery.
The kiwi edged higher against the pound but has weakened this morning following important Chinese data
Posted by admin on October 22nd, 2009
Having given up ground to the UK currency in early trading, the kiwi rallied steadily through the afternoon, to close marginally up at 2.1833. The pound found support yesterday after the BoE’s policy minutes revealed no direct discussion over further loosening the current monetary policy. In the wake of the news, sterling posted an intra-day high of 2.2074 as investors grew more confident in the outlook for the UK economy. However, the New Zealand dollar capped its losses as Alan Bollard, governor of the Reserve Bank of New Zealand, in a speech appeared surprisingly reserved over the recent appreciation of the kiwi dollar.
Pound continued to climb against the aussie yesterday as confidence in the UK economy improved
Posted by admin on October 22nd, 2009
A broadly stronger pound hit a two-week high against the aussie, briefly rising over 1.8000, as confidence in the UK economy gained momentum.Sterling jumped following the minutes from the Bank of England’s latest policy meeting, which dampened expectations of an extension to quantitative easing. The minutes appeared to move the balance of market expectations to the possibility of a pause of the government’s asset purchase scheme in November, reversing recent speculation. In addition, the aussie dollar found its strength undermined as commodity prices, most notably oil, turned lower, discouraging investors from the higher-yielding currency.
Euro managed to push through $1.50, but has slipped this morning following mildy disappointing Chinese data
Posted by admin on October 22nd, 2009
The single currency resumed its upward march against the greenback yesterday, finally broaching the 1.50 mark, to close up half a cent at 1.5015. In early trading, the euro retreated from near 14-month highs as some investors bet European policy makers would say they are still concerned that the euro’s strength will harm the economic recovery. Analysts also said that the single currency’s sharp fall against the pound weighed on the euro/dollar price, which has recently remained anchored just below the $1.50 level. However, the dollar relinquished its gains in the afternoon as rising U.S.
Sterling made substantial ground on the dollar yesterday as the BoE showed no sign of loosening montary policy further
Posted by admin on October 22nd, 2009
Dollar selling in the market was stepped up with investors moving into the pound as the MPC minutes proved more positive than expected. The pound climbed over 1.66, posting a two and half cent gain against the dollar as the minutes from the Bank of England’s October monetary policy meeting struck a less dovish tone than recent comments suggested. Analysts said the most important story within the release was the fact that in the September meeting, governor Mervyn King thought an expansion of the central bank’s quantitative easing programme could be justified. But there was no mention of that in this latest meeting.
The pound posted a one cent gain against the euro yesterday, buoyed by the MPC minutes
Posted by admin on October 22nd, 2009
Sterling reached a one-month high against the single currency, rallying strongly as the BoE’s latest policy meeting made no mention of further QE.The MPC minutes gave substantial support to the pound, which advanced 1.1% to reach a high of 1.1112, after they sounded a more positive tone than recent statements from policymakers suggested. It was revealed that the nine member committee had voted unanimously to leave the size of its asset purchase scheme unchanged at £175 billion, as had been widely expected, and made no direct reference to extending QE in the future.
Pound slid back against the euro yesterday, but has rebounded strongly in trading today
Posted by admin on October 21st, 2009
Sterling dipped slightly against the single currency, relinquishing gains in the afternoon as US equities slipped back, closing the day down just 0.1% at 1.0958. In early trading, investors picked up on comments from the ECB President who added to remarks from other eurozone officials expressing worries about the strength of the single currency. In response the markets took the euro slightly lower, enabling the pound to reach up over 1.10, near Monday’s 3-week high. In addition, the pound gained slight support after the UK public spending deficit in September fell short of market expectations, buoying investor sentiment.
Improving global economic sentiment continues to raise demand for kiwi assets, boosting the NZ currency vs the pound
Posted by admin on October 20th, 2009
The kiwi advanced over three and a half cents (1.6%) against the pound yesterday as investors showed renewed enthusiasm for risky assets. Rising commodity-prices and stronger-than-expected corporate earnings in the US have contributed to continued demand for higher-yielding currencies. In addition, investors are now pricing in that New Zealand’s central bank is likely to drop its monetary- easing bias at its meeting next week as economic data point to improvement. Although there has been speculation that the RBNZ has expressed concern that the strength of the kiwi is frustrating economic recovery, strong data has investors questioning whether the central bank can keep interest rates on hold until the middle of next year.
Euro pushes higher but finds strong resistence at $1.50
Posted by admin on October 20th, 2009
The single currency resumed its climb against the dollar in trading yesterday, supported by rising confidence in the global recovery, closing the day up 0.4%.The euro hovered just below the psychologically important 1.50 level as the US dollar remained under selling pressure on expectations that US interest rates will remain pinned at record lows well into 2010. The single currency also found support as some investors speculated finance ministers from the 16-nation region meeting in Luxembourg would focus on the currency’s strength. The dollar came under further pressure as the continued confidence over the prospects of a global economic recovery were reaffirmed as the Dow Jones opened up over 10,000, keeping haven demand for the dollar in check. Late in the afternoon, the Fed added to the greenback’s woes after stating that it has been testing its reverse repurchase agreement tool but is not about to use it, suggesting that US monetary policy is not set to tighten just yet.
Sterling traded strongly at the end of last week against the kiwi but has slipped back sharply this morning
Posted by admin on October 19th, 2009
Sterling managed to close last week at a near two-week high of 2.2056 against kiwi, as the UK currency continued to build on support from a BoE official. The ailing pound managed to build on Thursday’s gains, rallying a further 1.2% against the kiwi on Friday, in the wake of a Bank of England policy maker signaling satisfaction with the impact of the central bank’s quantitative-easing strategy. Investors took the opportunity to take strong profits that had been built up earlier last week, taking the sterling / kiwi price back over 2.20.
Profit taking ahead of the weekend allowed the pound to make further ground against the aussie on Friday
Posted by admin on October 19th, 2009
Sterling maintained its rally as investors continued to lock in profits ahead of the weekend, with the price closing the day at 1.7839. Having climbed to multi-year highs against the pound earlier last week, positive comments from members of the BoE concerning the quantitative easing programme triggered an opportunity amongst investors to take profit, driving the price higher. Comments on Friday were made that stated the asset purchase scheme is having its desired effect on the UK economy, dulling concerns about the possibility of a further expansion. There was also a slight pull back in demand for the higher-yielding aussie following a weak earnings report from the Bank of America, which gave investors further cause to cash profits.
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