Kiwi was unable to make ground on sterling at the end of last week, but is up 0.6% in trading this monring

The sterling/New Zealand dollar price was held in a deadlock in trading on Friday as concern over the UK fiscal position was offset by investors paring back positions in higher-yield currencies.

• The kiwi was under broad pressure as market participants continued to trim their risk positions ahead of a holiday-shortened week in the US.
  
• The pound was also broadly sold following on from Thursday's surprisingly high borrowing figures, which has resurfaced concerns over the fragility of the UK recovery.
  
• In response, the pair held relatively steady closing at 2.2783, with neither currency able to gain an advantage.
  
• Looking ahead to this week, the pair are likely to continue trading within range as investors await important inflation data from New Zealand released on Friday.

Though the high yielding aussie was under pressure at the end of last week, it posted gains against a broadly weaker pound

Sterling slipped over a cent against the aussie on Friday, giving up gains made earlier in the week, after weak borrowing figures undermined confidence in the UK economy.

• The aussie was broadly weaker on Friday as investors continued to take profits as global equities held their downward movement.
  
• However, the pound lost ground as sentiment toward the currency remained bearish following concern over rising debt levels in the UK.
  
• The Australian dollar is trading strongly again this morning, bringing the price back below 1.80, as gold rallies to a new high above $1165 per ounce.
  
• Analysts have also noted that the aussie's rise has been amplified as investors unwind bets on near-term weakness in the currency.

The euro was under pressure on Friday but has rebounded against a weaker dollar in trading this morning

The euro slid a further 0.4% against the US dollar on Friday, coming under pressure as an easing of risk appetite buoyed demand for the haven currency.

• Dollar gained ground quickly across the board at the end of last week as profit taking extended from commodity currencies to other majors.
  
• Analysts also pointed to comments from Jean-Claude Trichet, president of the European Central Bank in explaining the euro's decline.
  
• In a speech at the European Banking Congress, Mr Trichet said the ECB would gradually withdraw the emergency cash it had pumped into the economy, to ensure it did not fuel inflation. Market participants are concerned that recovery could stumble as stimulus measures are unwound.
  
• In trading this morning, the single has recouped its losses, already up over a cent, in the wake of dovish comments from US central banker James Bullard.
  
• In his speech he supported extending the central bank's purchases of mortgage- backed securities beyond the first quarter of next year, bolstered the view that interest rates are likely to remain at record lows.

Risk appetite was off the table at the end of last week, buoying demand for the dollar

Sterling fell sharply on Friday, falling 1% to a two-week low of 1.6463 against the dollar, on concerns over the UK's fiscal health and waning investor appetite for perceived risky currencies.

• Concerns over the fragility of the UK's banking sector kept the pound under pressure, particularly as they coincided with investors taking profits on riskier currencies.
  
• Analysts noted that a worrying fiscal position is not new information as far as the pound is concerned, but the size of the deficit did surprise the markets, which decided to take the currency even lower.
  
• The moves were exacerbated as UK debt concerns coincided with falls in equities and commodities which encouraged traders to take profits on the recent rise in riskier currencies against the dollar and the yen.
  
• In trading this morning, the pound is up over 0.5%, climbing back toward 1.66 following comments from a US Fed policymaker that stated stimulus measures should be kept in place and ensure interest rates remain low.

Sterling was lower on Friday, undermined by weak public debt figures

The pound fell to a one-week low against the euro on Friday as it slid further in the wake of data on Thursday showing UK public finances deteriorated almost twice as fast as expected last month.

• The data resurfaced concerns that record debt levels could threaten the UK's triple-A debt rating, dampening demand for the pound.
  
• The euro was also under broad pressure on Friday as rising risk aversion kept higher-yielding currencies on the back foot. Consequently sterling stemmed is losses against the single currency, finding support at 1.1100
  
• In trading this morning, the pound has lost further ground as bearish sentiment remains built up in following last week's data.
  
• Currently the pound is trading 0.3% down and has dropped back below the 1.1100 level.