The kiwi has relinquished gains made yesterday, as confidence in the pound returns

A strong rise in risk sentiment saw the pound fall further against the New Zealand dollar yesterday, to close at 2.3592, down 1.0%.

• Sterling traded around the lows it hit a couple of weeks ago as rallying equity markets eased risk aversion and spurred demand for higher-yielding currencies.
  
• Commodity driven currencies were the real winners yesterday, as investors relinquished haven positions in search of a greater yield.
  
• Confidence in the New Zealand currency also remained high as investors speculate on an upbeat statement from the RBNZ later this week, whilst speculators remained wary of a possible dovish statement from the BofE on Thursday.
  
• The recent rise for the kiwi has actually become an issue for Governor Alan Bollard, who has expressed his discomfort with its surge stating that the high rate may hamper New Zealand’s export led recovery.