Pound halted its slide vs the kiwi yesterday but has plummeted as confidence in NZ economy strengthens

In reduced trading yesterday, the pound rallied as investors booked profits, but gave back gains as risk appetite returned to the market.

• Initially, the higher-yielding kiwi gave back some of its recent gains against the pound as investors consolidated their positions.
  
• With markets in Japan, Singapore and several other Asian countries closed Monday for holidays and with little data to go on, investors may have chosen to continue to take profits and pare back on riskier positions.
  
• Analysts noted that the tone appeared to be one of consolidation as the market focused on this week's key events, which include the FOMC meeting, and MPC minutes.
  
• However, the negative sentiment toward the UK economy, and falling equities weighted on the pound, allowing the kiwi to rally back up to 2.2936.
  
• In trading today the kiwi has extended its gains by over three cents (1.4%) after the New Zealand’s biggest dairy exporter, Fonterra, raised its forecast payout to farmers and the current account deficit unexpectedly plunged to a near five-year low.