RBNZ statement has limited impact on kiwi, with sterling easing off only slightly

Having gained nearly 2 cents in two days against the kiwi, the pound has struggled this morning in the wake of the RBNZ rate statement.

• Yesterday, strong European equities were enough to outweigh solid commodity prices allowing the pound to gain further ground against the New Zealand currency closing 0.5% up at 2.3790.
  
• The FTSE in particular epitomised the impressive rebound in stocks that we have seen recently, surpassing 5000 points and encouraging demand for sterling.
  
• This morning however, risk sentiment has supported the kiwi as investors see through the modest statement issued by the Reserve Bank of New Zealand that warned further rate cuts were possible.
  
• The rate held at 2.50% which came as no surprise, the statement itself though spoke of a patchy recovery and a high New Zealand dollar that could stand in the way of true recovery.
  
• Investors were not too phased however, realising that threats of a rate cut were not too credible in the face of their recent economic forecasts.
  
• The kiwi is now trading marginally higher for the day, as investors await the BoE’s statement.