New Zealand dollar holds steady

The New Zealand dollar managed to hold its ground against sterling yesterday, although it neared 8 weeks lows against the aussie. Demand for higher risk currencies has grown with increased optimism over the early signs that the global economy may be starting to turn. This has given some support to the kiwi, but it continues to struggle against the aussie after the RBNZ lowered interest rates yesterday. With the RBNZ governor signalling rates could go even lower, markets are now expecting the yield variation between the aussie and kiwi to move further in favour of the aussie.