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NZ dollar gains vs Aussie on housing risks

NZN 21/03/2017 Rebecca Howard

The New Zealand dollar gained against the Australian dollar on Tuesday after Australia's central bank warned of growing risks in the housing market in its latest minutes.

The kiwi rose to A91.37c from 91.14c late Monday. It was at US70.47c from 70.37c.

According to the Reserve Bank of Australia, "recent data continued to suggest that there had been a build-up of risks associated with the housing market".

Also, "borrowing for housing by investors had picked up over recent months and growth in household debt had been faster than that in household income".

Westpac senior FX strategist Imre Speizer said the NZD/AUD cross rate "was starting to look very stretched on the downside".

He noted it has fallen around NZ6c since early February and may have pushed higher given "much of the selling has been done already ... it's got signs of fatigue about it."

Mr Speizer said there is little on the immediate horizon that will push the kiwi much higher against the Aussie, in particular given that prices on the GlobalDairyTrade platform are expected to drop for a third straight auction overnight as supply outstrips demand.

Also, the market is widely expecting the Reserve Bank of New Zealand to keep rates on hold at a record low 1.75 per cent on Thursday.

The kiwi pared some of the gains it made after UK Prime Minister Theresa May announced the date she will trigger Article 50 that puts in motion her nation's departure from the European Union and was trading at 56.98 pence. It touched 57.04 pence early in Wellington.

The kiwi traded at 65.51 euro cents from 65.40 euro cents. It was at 4.8673 yuan from 4.8582 yuan and 79.45 yen from 79.18 yen.

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