Sterling fell just 0.03% against the kiwi yesterday, but has suffered in trading this morning

The pound slowed its rate of decline against the kiwi yesterday, falling just 0.03% as weak Asian trading dulled risk appetite.

• The pound slipped lower, but stemmed its rate of decline as demand for the higher-yielding currency was curbed following weaker trading on the Asian markets.
  
• Sterling has been broadly sold recently following comments from the King and BoE, however the strong European stocks prevented the pound from sliding too sharply yesterday.
  
• Major European and US stock indices climbed between 1 and 2%, firming up confidence in the global recovery, and lending slight support to the ailing pound.
  
• In trading this morning however, the kiwi has already advanced 0.7% following positive building consents data from New Zealand, which has encouraged investor demand.
  
• Analysts say that with stocks continuing to push higher and central banks not yet ready to unwind stimulus measures, the New Zealand dollar is likely to maintain its upward trend.

Aussie has advanced further vs sterling as talk of interest rate hikes is renewed

Sterling slid for the third consecutive day against the Australian currency yesterday as the pressure of recent events and statements continued to weigh heavily.

• The aussie pushed higher, gaining another 0.9%, as the pound failed to shrug off comments made last week that a weak currency was in keeping with the BoE’s policy.
  
• The aussie dollar was also supported from a rise in commodity prices, particularly gold, which rallied back above $1000 per ounce yesterday.
  
• Additionally, risk sentiment among investors returned as stocks in Europe and the US traded strongly, buoying demand for riskier assets.
  
• In trading this morning the aussie has continued to advance, supported by renewed talk that the Reserve Bank of Australia would start raising rates in November.
  
• The speculation came after a central bank watcher said the RBA was almost certain to hike rates by 25 basis points in both November and December, which would make the Australian currency an even more attractive bet for investors searching for bigger returns.

Dovish words from the ECB president dragged the euro lower against the dollar yesterday

Talk of a slow recovery in the eurozone strengthened demand for the dollar yesterday allowing it to recover 0.5% to 1.4618.

• Support for the single currency was curbed slightly following the words of European Central Bank President Trichet, who spoke yesterday of a slow recovery in the 16-nation region.
  
• The governing council of the ECB considers that it would be premature to declare the crisis over, stating that now was not the time to implement an exit strategy.
  
• Additionally, analysts have said that on the whole, although the euro / dollar price is biased to the upside in the medium term, the single currency is now being challenged by corrective weakness.
  
• The single currency has dipped lower again this morning, currently trading marginally below 1.46, as investors hold off taking positions ahead of important US data this afternoon.
  
• There is a consumer sentiment survey out in the US at 15:00BST, which is forecast to reveal improved confidence in the market, which could weaken demand for the dollar.

Pound fell lower against the dollar yesterday, but found some support to ease its rate of decline

Sterling fell as persistent bearish sentiment pushed it to an intra-day four-month low of $1.5796 against the dollar, before closing at $1.5882.

• The pound managed to pull back slightly from early losses after Chancellor Alistair Darling made a speech in which he reiterated the need to curb “reckless” bonuses.
  
• His comments suggested that the government would be taking forceful steps to firm up the fragile banking system which returned a certain amount of confidence to investors and prevented the pound from falling further.
  
• The pound also benefited from slight profit taking and rising stocks, but analysts said that despite expectations for improving economic data, the sterling / dollar price looks vulnerable to a further downside push with strong resistance materialising around 1.5750.
  
• This morning, sterling is trading marginally lower as investors await important economic data released in the UK and the US today.
  
• CBI realized sales are out in Britain at 11:00BST, whilst in the US, data from a consumer confidence survey at 15:00BST is likely to reveal improved sentiment, which could stem demand for the haven currency.

Pound edged higher against the euro yesterday and has consolidated its position this morning

Having traded in the red for most of the day, the pound rebounded in the afternoon to close the day marginally up at 1.0859.

• ECB President Jean-Claude Trichet in a speech yesterday stated that the European economy will likely recover slowly in the coming months.
  
• Trichet continued, saying that it was too early for the ECB to stop pumping liquidity into the economy or to raise interest rates, which slowed demand for the single currency.
  
• Additionally, data showed that consumer prices in Germany fell faster than expected in September, which was a steeper decline than the market had looked for, capping the euro’s gains .
  
• In the UK, Hometrack Ltd revealed that UK house prices increased by the most in two years during September as confidence in the property market improved, although the news went relatively unnoticed by the market.
  
• Second quarter current account data and a revised GDP figure are out today at 09:30BST with forecasts predicting slightly improved numbers from the first quarter, which could lend support to the pound.