New Zealand dollar holds its ground

The New Zealand dollar managed to hold its ground against sterling yesterday, but lost further ground to the aussie.

• The kiwi found support from investors seeking high yielding currencies on the back of renewed optimism that the global recession may be ending.
  
• However, with the Reserve Bank of Australia giving indications that it is likely to keep rates on hold, this suggests that the interest rate differential between the kiwi and the aussie may widen even further. This obviously gives the aussie the upper hand in attracting foreign investors.