Sterling has rallied against the kiwi today, as investor sentiment for the New Zealand dollar weakened

The pound continued to slide against the kiwi on Friday, closing at 2.3553, as strong Chinese data supported demand for the higher-yielding currency.

• The kiwi has fallen sharply this morning though as speculators reduced their risk activity following a retreat in Asian markets, which dented demand for commodity driven currencies.
  
• The New Zealand dollar also suffered after soft data revealed that the country’s retail sales dipped unexpectedly in July, and from a broadly rebounding US dollar, which was sent higher by investors covering short positions.
  
• The sales data showed a dip of 0.5%, against a predicted rise of 0.5%, which showed that consumers remain cautious about New Zealand’s economic recovery.
  
• New Zealand’s data calendar is relatively light for the rest of the week, leaving the kiwi likely to follow broader market events and direction.

Following a positive start, the pound has lost value against the higher-yeilding aussie

The pound continued to climb against the aussie currency on Friday, closing up at 1.9307, as investment sentiment in the pound remained strong.

• Earlier this morning, the pound reached a weekly high of 1.9476, as higher-yielding currencies suffered a broad sell off.
  
• A fall in metal and crude oil prices weighed heavily on the Australian dollar. US crude for October delivery fell to around $63.13 a barrel while copper was lower in Asian trade.
  
• However, the pound has fallen from early highs, with the aussie currently trading around 0.3% higher for the day.
  
• Looking ahead, investors will focus on the minutes of the Reserve Bank of Australia’s September policy meeting which will be released on Tuesday.
  
• Investors have recently pared bets of a rate increase in Australia in coming months after surprisingly soft retail sales data and a weak jobs report.

Dollar trading slightly higher against the euro today, as demand returns to the haven currency

The dollar pulled back from four straight days of losses against the single currency on Friday, as investors decided to book profits before the weekend, with the pairing closing at 1.4568.

• The dollar continued to descend lower on Friday morning after a string of Chinese data came in better than expected, adding to global recovery hopes, prompting investors to keep transferring funds to riskier and growth linked currencies.
  
• However, a survey showed that consumer sentiment in the US was improving, which sent the euro down to an intra-day low of 1.4557, as investors took the opportunity to book profits following a bearish dollar week.
  
• The single currency has continued to lose value this morning, partly as a 2.4% drop in Tokyo’s Nikkei share average prompted Japanese investors to trim long positions in higher-yielding currencies previously built on hopes for global recovery.
  
• However analysts believe that the dollar’s overall downward trend is still unchanged, and that what we are seeing at the moment is little more than a technical rebound.

Having gained on Fridat, the pound has fallen back today against a broadly stronger US dollar

The pound continued to rally against the dollar on Friday, reaching a fresh monthly high of 1.6740, before relinquishing its gains as investors cashed in on profits made.

• Sterling continued to be supported on Friday by the view that the Bank of England’s decision to keep monetary policy unchanged suggests the UK economy may be stabilising.
  
• Demand for sterling remained intact after U.K. producer prices increased for a sixth month in August with a reading of 2.2%, adding to signs the recession may be easing.
  
• Sterling also drew strength from a small rise in weekly UK department store sales announced on Friday, which added to signs domestic consumer demand may be recovering.
  
• However later in the day, the pound fell prey to profit-taking as investors felt they had gone slightly long, which brought it back to close at 1.6657.
  
• The dollar has rebounded over a cent in trading this morning (0.7%) as traders felt the currency had been oversold, though analysts are saying that this is only a temporary blip in the greenback’s downward trend.

Sterling is dropping back today against the euro as equities fall

The pound edged up further against the single currency on Friday, but has lost its gains today following weaker equities.

• On Friday morning, investor confidence remained high following Thursday’s BoE decision to leave QE unchanged, which added economic stability.
  
• Equity markets also continued to rally, with the FTSE gaining another 0.5% to close up over 5000 pts, supporting the pound’s recovery.
  
• Additionally, the PPI index rose by 2.2% in August, far more than expected, which encouraged hopes that the recovery is strengthening.
  
• However, sterling’s advance was capped, with the price unable to reach above 1.1461, and trading remained tightly bounded throughout the day in a range between 1.1420 and 1.1440.
  
• In trading today, sterling has dipped back below 1.1400 as investors check their risk activity as equities markets have fallen.