Kiwi suffered a severed setback following the RBNZ rate statement yesterday evening

In a poor day for the kiwi dollar, the pound rose by over seven cents, or 3.1%, against the kiwi, reaching a one-month high as traders withdrew long positions.

• A slide on Wall Street and on European share indices, led by declines in the energy and banking sectors, accelerated a sharp fall in the "riskier" kiwi dollar.
  
• This was compounded after data revealed an unexpected fall in US new home sales for September, which, as general sentiment was that the housing sector was on the mend, raised concerns in the market, sapping demand for the kiwi.
  
• The New Zealand currency was further undermined in the evening, diving two cents, after the central bank dampened expectations of an early rate rise.
  
• The RBNZ left rates on hold at 2.50% as expected and moved to a neutral bias. But it added in its statement that it expected to leave rates on hold until the second half of 2010, against expectations of a rise later this year.
  
• In trading this morning, the kiwi has pulled back slightly, though the price remains up around 2.2650.

Aussie was broadly sold yesterday as investors withdrew riskier positions

The pound advanced by 2.3% against the aussie as risk appetite stumbled in the wake of weak US economic data and a steep slide in global equities.

• In the early session, Australian inflation data was revealed to be slightly below expectations, leading investors to pare bets that the Reserve Bank of Australia will decide on a hefty interest-rate hike next week.
  
• The consumer price index rose in the third quarter by an annual 1.3%, the smallest gain since the second quarter of 1999, after advancing 1.5% in the previous three months.
  
• In addition, the price of gold continued to fall in trading yesterday, finding resistance around $1030 per ounce, which dulled demand for the commodity-driven currency.
  
• The pound was able to reach a three-week high of 1.8290 as investors shed their risky assets yesterday, and the pound could advance further if the US GDP data, released later today, disappoints market expectations.

Weak US data enabled the US dollar to continue clawing back losses against the euro

The single currency slipped further away from recent 14-month highs against the dollar yesterday, losing nearly a cent to close down at 1.4707.

• The US dollar rose, stretching a rally against the euro to a fourth day, supported by weak U.S. economic data that weighed on equity markets and led investors to seek safety in the greenback and cut exposure to assets perceived as risky.
  
• Initially though, the euro pared early losses after data showed core US durable goods orders were better-than-expected in September.
  
• The report revealed that the core figure, which excludes transport equipment, rose by 0.9%, higher than forecasts of a 0.6% rise, strengthening risk appetite in the market.
  
• However, in the afternoon the euro extended losses after further data showed that US home sales unexpectedly fell, declining 3.6% last month to an annual rate of 402,000, disappointing market forecasts that expected a 2.6% rise.
  
• Analysts noted that the soft housing sales figure offset positive durable goods orders, given that the latter data is generally volatile and sometimes does not represent the whole economic story.
  
• In trading today, investors will be eagerly awaiting US 3rd quarter GDP data, released at 12:30.

Sterling edged up against the dollar and is currently consolidating over 1.64 ahead of US GDP data

Sterling closed marginally up against the US currency yesterday, although the price was pulled back significantly following weak US housing data.

• In early trading, the pound lost ground to the dollar as falls in equity prices encouraged investors to trim their exposure to perceived higher risk currencies.
  
• UK stocks slid to a three-week low, helping to push the price down to 1.63, well under a level just below 1.67 reached only a week ago.
  
• The pound was then able to make slight gains in the afternoon after positive durable goods data weakened dollar demand, but the pair found resistance at 1.64.
  
• This data was then offset in the afternoon after it was revealed that sales of new homes in the US declined in September, against analyst expectations of a slight increase, which supported an upside movement
  
• In trading today, markets will take direction from the US third-quarter GDP figure at 09:30, which is predicted to show a growth rate of 3.3%. Should it undershoot this forecast, investors are likely to move back into the dollar.

Falling global equities enabled the pound to post gains against the euro

The pound continued to advance against a broadly weaker single currency yesterday, hitting a six-week high of 1.1167 as investors trimmed their euro holdings.

• Preliminary CPI data from Germany revealed that consumer prices remained flat on the year in October. Monthly data showed that the index did rise by 0.1% in October from September, though this rise failed to garner support for the euro.
  
• The markets also saw a slight withdrawal of risk activity yesterday as weak housing data in the US renewed concern over the health of the global recovery.
  
• The data dragged European equities down to three-week lows, which appeared to impact more severely on the single-currency, enabling the pound to gain.
  
• This morning, the pound is consolidating its position above 1.1100, with analysts reiterating that sterling is likely to remain in a holding pattern until next week’s BoE asset purchase decision.
  
• Investors are cautious amid uncertainty over whether the Central Bank will extend their quantitative easing programme, and so sterling movements may continue to be dictated by risk appetite in over the coming days.

Sales data took the pound higher against the kiwi, continues to climb in trading this morning

The pound made up further ground on the kiwi dollar, gaining 0.65% after positive sales data supported evidence that the UK economy is still on the road to recovery.

• The sales data, which came in above market forecasts, encouraged investors to buy back into the UK currency, with the price briefly reaching above 2.20.
  
• Conversely, selling pressure remained on the New Zealand dollar after the nation's Prime Minister expressed concern over the currency's strength, and stated that there were few tools with which to deal with it.
  
• Higher-yielding currencies were also under pressure overnight as Asian equities turned negative, with Nikkei 225 losing over a percent, dulling demand for "riskier" assets.
  
• In trading this morning the pound has continued to rally, rising to a three-week high over 2.22 as a New Zealand business confidence survey unexpectedly undershot forecasts, weakening the possibility of a hawkish RBNZ rate statement to be made this evening at 20:00.

The pound continues its rally against a broadly weaker aussie

Sterling edged up against the aussie yesterday, benefiting from improved UK sales data, which supported claims that the UK economy is recovering.

• On Monday evening, MPC member Adam Posen, following negative GDP data, stated that there were still signs of an economic recovery even if Britain is behind other countries in pulling out of the recession.
  
• His statement found support yesterday after the UK CBI sales showed month-on-month improvement, beating market expectations and buoying demand for the UK currency.
  
• The UK currency has pushed higher in trading this morning after investors pared bets of a steep rate rise in Australia after inflation data did not increase by as much as some had anticipated.
  
• The quarterly CPI figure came in at 1.0%, which tilted the markets away from pricing in a more aggressive upward rate movement at the next RBA meeting on Nov 3 rd.
  
• Currently the pair are trading around the 1.80 level, just below a three-week high for the pound.

US dollar continues to push higher against the euro, as consumer confidence stumbles

The dollar rose against the single currency for a third consecutive day in its longest advance since August, as a report showed US consumer confidence fell this month.

• The euro struggled in trading yesterday after data showed that public sector lending in the eurozone declined by 0.3% in September compared to this period last year.
  
• The figure raises concern that there are still few signs that the ECB's unlimited provision of liquidity to banks is prompting any pick up in eurozone broad money lending, which could put pressure on the single currency.
  
• The euro then continued to slide, after data revealed that US consumer confidence unexpectedly fell in October as fears about future job prospects increasingly preyed upon the American public.
  
• The index fell to 47.7 from 53.4 in September, disappointing market expectations of a rise and spurring a return to perceived safety of the greenback.
  
• In addition, traders noted that as the single currency breached a key technical level at $1.4850, stop-losses were triggered, which pushed the single-currency to a two-week low of $1.4773.

Pound edges higher against a stronger dollar, which found support from weak consumer sentiment

Sterling closed up against the dollar yesterday, but slipped back nearly a cent from its intra-day high after a survey showed that consumer confidence in the US disappointed market expectations.

• In early trading, the markets continued to take the pound higher with analysts noting that long term investors and Asian reserve managers were attracted by sterling's one-week low.
  
• This trend was maintained as the UK CBI retail sales index advanced to a balance of +8 in October from a balance of +3 in September, the largest advance since June 2007, beating forecasts.
  
• There was also support for the UK currency as the oil giant BP reported third-quarter profits of $4.98bn (£3bn), which experts said "obliterated" market predictions.
  
• However, the dollar trimmed its losses in the afternoon after a survey revealed that US consumer confidence dropped in October. The index produced a figure of 47.7, substantially less than the 53.7 forecast, which cautioned traders against risky investments.
  
• The weak report bodes ill for the US economy indicating restrained consumer spending, and suggests that the recovery is not as entrenched as initially thought.

Pound pushes up against the euro, spurred by positive sales figures

Sterling pushed back over 1.10 in trading yesterday as data revealed a pick-up in UK realised sales dulling concerns over the health of the British economy.

• The pound continued to recover last week's losses as the UK CBI realised sales index revealed a significant monthly increase in sales volumes, beating market forecasts.
  
• Conversely data also showed that lending to the eurozone's private sector declined in September compared with the same period a year earlier, highlighting notable constraints on financing to companies and households that could damage the region's economic recovery.
  
• Private-sector lending decreased 0.3% in September, after rising by an annual rate of 0.1% in August, data from the ECB revealed.
  
• In addition, traders noted good demand for sterling from longer term investors and Asian reserve managers who were keen to sell the dollar following the US currency's sharp gains in the previous session.
  
• However, the pound remains range bound, slipping back marginally this morning, as investors remain cautious after MPC member Adam Posen in his speech on Monday evening reminded market players that UK officials may maintain stimulus programs in order to cement the recovery.