Sterling lost ground to the kiwi yesterday but is up nearly three cents today following a comment from NZ's opposition leader

The pound was lower in trading on Wednesday, coming under pressure from the minutes from the Bank of England’s latest committee meeting and closing down at 2.2446.

• The minutes revealed a lack of consensus among the committee members over the level of monetary stimulus measures needed at this stage of the economic recovery.
  
• The report also reiterated the slow growth prospects for the UK economy and warned that inflation rates could stay below the 2% target even well into 2011, which was another sterling negative.
  
• However, in trading this morning the kiwi dollar has been broadly sold as investors pare back their riskier positions.
  
• In addition, comments from New Zealand’s opposition leader on the method in which monetary policy should be conducted has given investors further reason to take profits.
  
• Currently the pound is at a 10-day high against the kiwi, up nearly three cents on the day, hovering above 2.27.

A weak aussie made hesitant gains against the pound yesterday following a dovish report from the BoE

Sterling dropped back half a cent in trading yesterday to hover marginally above 1.80 against the aussie as investors picked up on notes from the latest BoE policy meeting.

• The minutes reiterated the possibility of further reducing the base interest rate in order to ease credit conditions, a policy that many thought was no longer in question.
  
• However, the pound did not drop as sharply as it did elsewhere with demand for the aussie also under pressure as US equities traded in the red, dulling risk appetite.
  
• Analysts also noted that the investors remained cautious towards the Australian dollar after the RBA expressed hesitation over a further rate rise this year.
  
• The pound has recouped its losses this morning, climbing back toward 1.89. Analysts have cited the fact that investors’ are looking to lock in profits as year-end approaches following a long rally which carried the aussie to a 15-month high against the US dollar.

Euro made gains against the dollar yesterday but has relinquished them this morning as investors pare back "riskier" positions

The single currency traded strongly against the dollar, recovering losses incurred on Tuesday, to close the day back up near 1.50 at 1.4963.

• The dollar slipped back as the President of the Federal Reserve Bank of St. Louis, James Bullard, said past experience indicates policy makers may not start to raise interest rates until early 2012.
  
• The euro pared some gains after data showed tame underlying US inflation data and a decline in housing starts lasts month, suggesting a US recovery will be a slow one.
  
• US housing starts tumbled 10.6% in October to their lowest level in seven months, which did little to enhance the outlook for the economy and lent some support to the dollar.
  
• Analysts also noted that traders were taking profits yesterday in the wake of the greenback's biggest rise in three weeks, with fresh data doing little to alter the view that US interest rates will remain at record lows well into 2010.
  
• In trading this morning, the euro has once again relinquished its gains, currently trading down 0.6%, as traders take profits from carry trade currencies and pare back “risk” positions.

Sterling was under pressure yesterday as the minutes revealed indecision over the extension to QE

Sterling was under pressure in trading yesterday, losing half a cent to the dollar as a report revealed a split vote over the extension of quantitative easing among the MPC members.

• Sterling was pushed to session lows after the minutes showed a three-way split of the asset purchase scheme: one member had voted for an increase of £40 billion, where as one was in favour of no extension at all. The other seven all agreed upon the £25 billion that was actually implemented.
  
• Analysts noted that the inclusive nature of the minutes suggested that further monetary easing was still on the table, which weakened sterling.
  
• In addition, the committee discussed the merits of cutting the base interest rate from the current 0.5%. Although they concluded that it was not currently necessary, the mention of it dulled demand for the pound.
  
• The dollar extended gains after weak US housing data reduced appetite for risk. The Commerce Department reported that US housing starts dropped last month to an annual rate of 529,000, from a revised 592,000 in September.
  
• The pound has lost further ground this morning, currently down a further cent, as softer equities during the US and Asian sessions dampen risk appetite.

Bank of England minutes proved tough for sterling, which lost considerable ground to the euro

The pound depreciated for the first time in five days against the euro, losing 1.0% from its intra-day high at 1.1311 following the release of the minutes from the latest BoE policy meeting.

• Sterling lost ground after the Bank of England minutes revealed a three-way split in the decision to increase asset purchases by £25 billion at its meeting earlier this month.
  
• Among the nine Monetary Policy Committee members, one, David Miles, called for a £40 billion increase, while BoE chief economist Spencer Dale, favoured no increase at all.
  
• Analysts said the minutes left the question of whether the central bank will increase quantitative easing beyond its current £200 billion target largely unanswered. The door was open to more although such a prospect looked unlikely.
  
• Sterling also came under pressure after a survey showed that UK factory orders fell this month at their slowest pace since December, although export demand was at its strongest since April.
  
• Meanwhile, investors will be keeping an eye on any positive prospects for sterling from merger & acquisition talks as a bidding war mounts for UK confectioner Cadbury Plc.
  
• The pound may also find some support today should UK retail sales data, released at 09:30, follow market expectations and reveal a month-on-month rise.