New Zealand dollar holds its ground

The New Zealand dollar managed to hold its ground against sterling yesterday, as gains in equity markets and a reversal in risk aversion saw some support for the kiwi.

• Equities in the UK and the US rose yesterday, encouraging investors to buy back into riskier currencies like the New Zealand dollar.
  
• However, the kiwi’s support will remain tentative given the country's ongoing economic woes.
  
• Markets are likely to wait for further economic data, which may give further clues to the recovery process of the world economy, before giving the kiwi further support.