Kiwi slid sharply yesterday as traders bought back into the US dollar

The pound rallied over three cents, or 1.5%, against a broadly weaker kiwi dollar yesterday as traders sold off their higher-yielding investments in the wake of sliding stock prices.

• Sterling was able to hit a ten-day high against the New Zealand dollar, which came under pressure from profit taking in carry trades that had been put on earlier in the year.
  
• In addition, investors were quick to trim their holdings in higher-risk currencies in the wake of falling equity and commodity prices.
  
• Overnight, both the Nikkei and Shanghai Composite lost ground following similar falls in the US session, which drove the kiwi lower.
  
• In trading this morning, the pair are trading steadily around the overnight closing price. With little economic data out, the price is likely to take its lead from broader equity prices and profit taking habits.