The kiwi made strong gains against the pound at the end of last week but has pared its gains this morning

Sterling slipped back nearly two cents against the kiwi dollar as risk appetite was upheld by strong US and Asian equities.

• Having traded sideways during the European session on Friday, the kiwi made gains as the US equity markets opened on a positive note, despite weaker than expected trade data, which spurred a modest return to risk appetite.
  
• In trading this morning the kiwi is slightly lower after data showed little inflationary pressure in the economy, supporting the central bank's view that rates will be on hold until the second half of 2010.
  
• The New Zealand producer price index fell more than expected in the third quarter, while activity in the services sector retreated for the first time in four months in October, reflecting a patchy recovery from the recession.

Higher equities and gold prices kept the aussie trading strongly on Friday

The pound was down 0.4% against the aussie dollar as stronger US equities maintained a level of risk appetite, which supported the higher-yield currency.

• In addition to stronger stocks, the aussie also found support from a continued rise in the price of gold as investors looked to diversify their trading portfolios in order to hedge against a weak US dollar.
  
• Gold climbed to an all-time high as investors stepped up purchases of the precious metal on speculation that the dollar will extend its decline.
  
• However, the world's top mining companies have warned today that global production of gold is likely to resume a long-term decline in coming years, which may prove a burden to the aussie in the future.
  
• In trading this morning, the pair are holding steady, with investors awaiting comments from Obama's visit to China where the valuation of the Chinese yuan is being discussed.
  
• Given the close trading relation between China and Australia, the strength of the yuan has strong influence on that of the aussie.

The euro traded higher than the dollar at the end of last week following positive EU growth data

The single currency was up half a cent against the dollar on Friday, recovering some of its mid-week losses as investors chose to take profits in the greenback.

• The dollar lost ground against most major counterparts on Friday for the first day in three, with strategists attributing the modest weakness to investors taking profits on the greenback's recent bounce.
  
• In the eurozone, data revealed that German GDP expanded 0.7% in the third quarter and French growth was at 0.3%. Although these figures fell short of market expectations, they confirmed continued economic expansion, which lent support to the euro.
  
• The greenback briefly extended losses after data showed that the US trade deficit widened more than forecast, to $36.5 billion in September, enforcing sentiment that rates would remain low for some time.
  
• The dollar also stayed lower as stocks held onto gains after the Reuters/University of Michigan index showed consumer sentiment unexpectedly declined in early November to its weakest level in three months.
  
• The single currency has continued to climb higher this morning, currently up half a percent to regain its positions just below $1.50.

Sterling posted gains against the dollar on Friday and is continuing to make ground this morning

The pound was a cent up against the dollar on Friday as market participants took profits on the greenback's modest bounce earlier in the week.

• The greenback extended losses after data showed that the US trade deficit widened more than forecast, to $36.5 billion in September, and that import prices rose 0.7% last month.
  
• Strategists noted that while trade is not usually a prime driver of currencies, the combination of rising imbalances and extremely low rates is typically a US dollar negative.
  
• The pound rose as a planned merger of British Airways Plc and Iberia Airlines sent the UK's stock market slightly higher and spurred speculation the economy is improving, boosting demand for the currency.
  
• However, sterling buying is commonly seen as market strategy when the price drops to $1.65 rather than speculative buying, as investors are keen to pick up sterling as it falls to cheaper levels.
  
• In trading this morning, the pound has pushed through resistance at $1.67, currently up over half a cent as rhetoric over China's yuan currency policy increased.
  
• Investors will be watching US retail sales data for October released at 13:30, which, if it follows forecasts, could boost risk appetite.

Sterling made its way back towards 1.12 on Friday but has edged down in trading this morning

Sterling enjoyed a slight rally at the end of last week, once again briefly stretching up over 1.12 against the single currency before closing at 1.1188, up 0.2% on the day.

• Sterling recovered some of its two-week losses against the euro on Friday as traders closed short positions in the UK currency ahead of the weekend.
  
• The single currency found itself on the back foot after data showed that the eurozone returned to growth in the third quarter, but at a slower pace than expected.
  
• The euro-zone economy registered quarter-over-quarter growth of 0.4%. The figure fell short of the 0.6% increase forecast by economists, largely due to a weaker-than-expected outcome turned in by both France and Germany, the region's two largest economies.
  
• The pound also found support as a planned merger between British Airways and the Spanish Iberia airline spurred speculation that the economy is improving.
  
• Analysts noted that the slight gain for sterling on Friday showed an unwinding of pessimism that followed the inflation report, although the currency would remain volatile because of the continued uncertainty on the British monetary policy.