Investing.com - The New Zealand dollar traded higher against its U.S. rival during Tuesday’s Asian session as hopes rose that the U.S. government shutdown is close to ending.
In Asian trading Tuesday, rose 0.17% to 0.8373. The pair was likely to find support at 0.8268, the low of October 11 and resistance at 0.8401, the high of September 20.
Although talks between U.S. President Barack Obama and House Republicans broke down over the weekend, hope was reignited Monday when Senate sources commented that an agreement to reopen the government could be in place later Tuesday.
The government in the world’s largest economy is the midst of its first shutdown since the 1990s and fears are high the shutdown will not end before October 17, the day the debt ceiling must be extended or the U.S. risks its first ever sovereign debt default.
Although the government shutdown and fears of a U.S. default are seen as significant headwinds, U.S. stocks have risen four straight days and it is expected that if the government gets back to work and solves the debt ceiling issue, riskier assets like the Kiwi will benefit.
"The underlying issue in the New Zealand housing market is a shortage of supply. In Christchurch this is a direct result of the earthquakes. In Auckland, the shortage has been growing over a much longer period, with weak rates of house building since 2005," according to the text of a speech given by Reserve Bank of New Zealand Deputy Governor Grant Spencer in Auckland today.
Spencer said that the loan-to-value (LVR) restrictions on bank mortgage lending, introduced on 1 October, are aimed at moderating house price inflation by reducing the effective demand for housing. While they should help to reduce house price inflation, New Zealand house prices are likely to remain high on most metrics. In this sense it is hard to see how LVR restrictions will materially reduce the existing incentives to develop new residential property, according to RBNZ’s web site.
Elsewhere, NZD/JPY rose 0.06% to 82.47 while AUD/NZD added 0.18% to 1.1377.
In Asian trading Tuesday, rose 0.17% to 0.8373. The pair was likely to find support at 0.8268, the low of October 11 and resistance at 0.8401, the high of September 20.
Although talks between U.S. President Barack Obama and House Republicans broke down over the weekend, hope was reignited Monday when Senate sources commented that an agreement to reopen the government could be in place later Tuesday.
The government in the world’s largest economy is the midst of its first shutdown since the 1990s and fears are high the shutdown will not end before October 17, the day the debt ceiling must be extended or the U.S. risks its first ever sovereign debt default.
Although the government shutdown and fears of a U.S. default are seen as significant headwinds, U.S. stocks have risen four straight days and it is expected that if the government gets back to work and solves the debt ceiling issue, riskier assets like the Kiwi will benefit.
"The underlying issue in the New Zealand housing market is a shortage of supply. In Christchurch this is a direct result of the earthquakes. In Auckland, the shortage has been growing over a much longer period, with weak rates of house building since 2005," according to the text of a speech given by Reserve Bank of New Zealand Deputy Governor Grant Spencer in Auckland today.
Spencer said that the loan-to-value (LVR) restrictions on bank mortgage lending, introduced on 1 October, are aimed at moderating house price inflation by reducing the effective demand for housing. While they should help to reduce house price inflation, New Zealand house prices are likely to remain high on most metrics. In this sense it is hard to see how LVR restrictions will materially reduce the existing incentives to develop new residential property, according to RBNZ’s web site.
Elsewhere, NZD/JPY rose 0.06% to 82.47 while AUD/NZD added 0.18% to 1.1377.