Sterling has resumed its recent upward trend against the kiwi, buoyed by brief market selling in high-yielders and by the MPC minutes

Sterling climbed over a cent and a half against the kiwi in trading yesterday as the market briefly turned bearish on higher-yielding currencies.

• The pound reversed losses incurred on Monday, but closed the day some way from its intra-day high of 2.2000 as investors held back from taking significant positions ahead of the UK MPC minutes released today.
  
• The kiwi dollar, which has broadly risen as the global economy shows increasing signs of recovery, fell back as demand for “riskier” assets stumbled following some weak economic data from the US economy.
  
• The US Producer Price Index revealed an unexpected monthly drop of 0.6%, with forecasts predicting a rise of 0.1%. Housing starts also disappointed market expectations, resurfacing concerns over the pace of US economic recovery.
  
• In response, global equities also halted their recent rally, which spurred a pull back from higher-yielding currencies, allowing the pound to gain.
  
• In trading this morning, the pound is broadly rising, sustained by the minutes from the latest UK MPC minutes, which revealed that a unanimous decision to keep QE on hold.

The pound is gaining against the aussie as risk appetite briefly dulls and sterling demand picks up

The pound posted gains against the aussie dollar yesterday as risk appetite waned slightly with weak data emerging from the US and equities slipping back.

• The US PPI unexpectedly decreased by 0.6% in September, disappointing expectations of a 0.1% rise, which raised concern over the strength of the US recovery.
  
• Data from the US housing market also fell below market forecasts, dulling investor appetite to buy into perceived “riskier” assets, weakening demand for the aussie.
  
• Sterling’s advance was relatively steady though, with the price rising less than 0.4%, as the broad strength of the Australian currency prevented traders from selling their investments in any great number.
  
• In trading this morning, the pound is climbing at a good rate, having been given momentum from upbeat MPC minutes, with the price currently over 1.79.

Lower equites, dulled risk appetite yesterday enabling the US dollar to post gains against the euro

The single currency slipped back from a fresh 14-month high against the dollar following further comments from the ECB that expressed apprehension over the euro’s strength.

• In early trading, options buying once again prevented the euro from pushing through the psychologically important $1.50 level, posting a high of $1.4993.
  
• The single currency was supported after further positive corporate earnings weighed on haven demand for the dollar, emboldening investors to sell the low-yielding US unit to fund the purchase of riskier, higher-yielding assets elsewhere.
  
• However the euro fell back as the ECB repeated their support for the US Treasury's self-professed strong-dollar policy, and expressed concerns over recent “volatile” trends in the market and the strength of the single currency
  
• In the afternoon Wall street slipped as tame US inflation data offset strong quarterly earnings from Apple, denting investor appetite to sell the low-yield dollar.
  
• The economic data, which showed that the US PPI unexpectedly dropped by 0.6% last month, disappointed market expectations and helped the greenback recover earlier losses, though analysts said that it would remain under pressure as long as stocks continued to show an upward trend.

Sterling edged down against the dollar yesterday, but is currently trading back over 1.65 this morning

Sterling capped its five-day upward trend against the dollar, falling back from a one-month high of $1.6487 as weak economic data supported the haven currency.

• In early trading, sterling held steady against the dollar after UK public finances showed a weak figure but better than market expectations, which offset the negative impact of news that Qatar are selling a significant stake in Barclays bank.
  
• Data showed a deficit reading of £14.8 billion bringing Britain’s public spending to its worst six months on record, however, the data was better than forecasts, which analysts said boosted sterling’s gains.
  
• In addition, the US dollar came under pressure as risk appetite continued to rise following encouraging quarterly earnings from US corporations, such as Apple and Caterpillar.
  
• The US currency found some support in the afternoon though after data revealed weaker than expected US PPI and housing starts figures, which were able to induce some haven demand for the broadly weak dollar.
  
• In trading this morning, the pound has resumed its upward trend against the greenback, currently up over a percent as the UK MPC minutes confirmed that the decsion not to extend QE was unanimous.

Pound slid back against the euro yesterday, but has rebounded strongly in trading today

Sterling dipped slightly against the single currency, relinquishing gains in the afternoon as US equities slipped back, closing the day down just 0.1% at 1.0958.

• In early trading, investors picked up on comments from the ECB President who added to remarks from other eurozone officials expressing worries about the strength of the single currency.
  
• In response the markets took the euro slightly lower, enabling the pound to reach up over 1.10, near Monday’s 3-week high.
  
• In addition, the pound gained slight support after the UK public spending deficit in September fell short of market expectations, buoying investor sentiment.
  
• However, the euro trimmed its losses in the afternoon as global equities turned negative and investors cautioned over taking long positions ahead of a speech by Bank of England Governor Mervyn King in the evening.
  
• In trading today, the pound has broadly strenghtned as the MPC minutes from their latest meeting sounded a relatively positive tone. Currently the UK currency is trading one percent up on the single currency, approaching €1.11.