Currency - GBP / New Zealand Dollar

Having raised their interest rate last week the Reserve Bank of New Zealand set its stall out that it was not seeking to hike interest rates unless it was truly necessary. IF China does act to slow its economy, the fall in commodity prices may make it necessary for the RBNZ to cut their base rate again but they are hopeful that the economic recovery is robust enough to withstand such a move. Either way, the effect on the NZ Dollar was to strengthen it against most other currencies; the gain against the Pound has taken us from NZ$ 2.20+ on 31st May to just NZ$ 2.10 today. We are sitting on a support level which is quite important to anyone who missed the spike or was waiting for better levels. If the NZ$ 2.10 level fails, then another drop to the bottom of the trading range is inevitable and that is now all the way down at NZ$ 2.02. Obviously, if this support holds, the potential exists for a rally to the top of this range again but as this is a declining trend line, that is now just NZ$ 2.1850.