Forex - Kiwi gains on RBNZ Auckland housing move, China data ahead

Investing.com - The Kiwi gained in early Asia on Wednesday after tighter house lending rules planned for New Zealand's largest city, Auckland, as investors look to a busy data day ahead in China.

NZD/USD traded at 0.7394, up 0.46%.

The Reserve Bank of New Zealand on Wednesday announced changes to its macro-prudential policy targeting the Auckland area to deal with the increase in financial stability risks from stretched housing prices.

The RBNZ will issue a consultation paper in late May to outline these proposals in further detail and seek feedback, and plans to implement the rules beginning Oct. 1.

In the half-yearly Financial Stability Report issued Wednesday the RBNZ said the changes "involve a new restriction on loans to property investors in the Auckland region with a (loan-to-value ratio) of greater than 70% (i.e. to set a speed limit on such loans at close to zero).

In Australia, the first quarter wage price index is due in the morning at 1130 Sydney (0130 GMT). Wage price index for the first quarter is expected to rise 0.6% quarter-on-quarter, the same pace as the fourth quarter but the year-on-year pace is expected to drop to a new record low of 2.4%.

AUD/USD traded at 0.7978, up 0.03%, as investors continue to assess the shakeout from tight federal budget spending proposals issued on May 12 that appear out of synch with a slowing economy and may lead the central bank to cut rates further from a record low 2%.

In Japan, BoJ board member Takehiro Sato is due to speak on repo market reform at the Futures Industry Association Japan conference in Tokyo at 1145 (0245 GMT).

USD/JPY traded at 119.87, up 0.01%

In China, April industrial output, retail sales and fixed-asset investment data are due at 1330 local time (0530 GMT). Fixed asset investment is seen up 13.5%, industrial production gained 6.0% and retail sales are expected to gave risen 10.5% - all year-on-year.

The U.S. dollar index was quoted down 0.05% at 94.66.

Overnight, the dollar remained broadly lower against a basket of other major currencies on Tuesday, as a renewed selloff in European government bond and stock markets continued to weigh on the greenback and as trading volumes were thin with no major U.S. data to be released.

The single currency was boosted as a fresh selloff in global bond markets undermined greenback strength. German 10-year bund yields jumped, narrowing the gap with their U.S. counterparts.

German bund yields act as benchmarks for European financial markets and higher yields push the euro higher against the dollar. Yields rise as prices fall.

Earlier Tuesday, Greece repaid a €770 million loan installment to the International Monetary Fund, easing concerns that it was on the verge of default although fears over the country’s future in the euro area persisted.

Athens is scrambling to reach an agreement with its international creditors on a package of economic reforms in order to access fresh bailout funds and avert a liquidity crunch.