Kiwi strengthens despite poor GDP figure

The kiwi again strengthened against sterling yesterday, despite worse-than-expected New Zealand first-quarter GDP figures overnight.

• New Zealand’s statistics bureau reported a fall in GDP by 1% last quarter, far worse than the 0.7% analysts had been expecting. This stirred speculation the Reserve Bank of New Zealand may cut interest rates further from a record low of 2.5%.
  
• Nevertheless, the kiwi strengthened after gains on Asian stock markets overnight which, together with downbeat comments from Bank of England policymakers, made the kiwi more attractive to investors than sterling.
  
• There are no major announcements due in either the UK or New Zealand today, with today’s trading likely to be dictated by reaction to last night’s New Zealand GDP figure.