New Zealand dollar gives back some ground to the pound

The New Zealand dollar gave back some of its recent gains against the aussie and sterling yesterday, as positive global economic sentiment began to wane.

• Weak economic data out of both the US and the UK saw a return of risk aversion, denting demand for high yielding currencies.
  
• The BoE’s inflation report suggested inflation may fall to 0.5 percent, while the economy may contract further over the next few months before recovering at a slower pace than expected.
  
• A Reserve Bank of New Zealand report also weighed on the New Zealand dollar, with the report saying the central bank needed to maintain its current liquidity levels due to further bad debts and losses by banks being likely.