Kiwi enjoys steady gains as risk makes a slight return

The pound slid back over half a cent against the kiwi yesterday as investors showed slightly more appetite for risk assets in the wake of positive US data.

• A raft of positive data in the manufacturing, construction, and housing sector’s yesterday raised confidence over the health of the global economy, benefiting higher-yield currencies.
  
• The kiwi also found support after the country’s Treasury said it expected the economy to grow at an annualised rate of about 2% in the second half of the year.
  
• Conversely the pound slipped back in trading, undermined by market speculation that the Bank of England would agree to extend their quantitative easing programme on Thursday.
  
• Data released yesterday morning revealed that growth in the UK’s manufacturing sector is accelerating, but the market appeared to shrug off the positive data, suggesting that investors are unlikely to take up sterling positions ahead of the BoE meeting later this week.
  
• The kiwi is continuing to trade strongly this morning, up a further 0.3% on sterling, bringing the price back below 2.28.