New Zealand dollar's recovery stalls

The New Zealand dollar's recovery stalled yesterday, as falling equity and commodity prices saw investors tighten up on their risk exposure.

• Many analysts believe the kiwi’s gains are overdone and that domestic economic fundamentals will start to drive the currency again.
  
• Although there are some early signs that the decline in economic activity may be levelling off the short term outlook for the economy is still fairly gloomy.
  
• More negative domestic data should therefore allow the pound to recover further ground against the kiwi.