Weak data undermines New Zealand dollar

The New Zealand dollar gave back some of its recent gains against sterling yesterday, as weak domestic data pointed towards a deepening recession in New Zealand. The NZIER business opinion survey revealed sentiment was at a 35 year low, with expectations that further economic weakness was to come. This has also led to speculation that the Reserve Bank of New Zealand may have to lower interest rates further. Demand for the high yielding kiwi was also dragged lower as markets again became nervous over the outlook for the banking sector.