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Australian, New Zealand dollars hover near recent peaks on global stimulus hopes
[SYDNEY] The Australian and New Zealand dollars were little changed against the greenback on Monday after gaining in the past four sessions as expectations global central banks would support world growth gave investors confidence in riskier assets.
The Australian dollar, a liquid proxy for risk, inched up to US$0.6854 at 0410 GMT to stay near a six-week peak of US$0.6862 visited on Friday.
The Aussie climbed 1.7 per cent last week for its best weekly performance in nearly a year.
The New Zealand dollar was barely changed at US$0.6427, not far from a three-week high of US$0.6444 touched on Friday. It jumped 1.9 per cent last week to post its best showing since late June.
Helping global sentiment was news last week that the United States and China will resume trade talks in October, spurring a risk rally in equities markets.
Further cheering investors, China decided to add stimulus to its economy on Friday through the third cut in bank reserve requirements this year as the world's second-largest economy comes under pressure from escalating US tariffs.
At home, data out earlier in the day showed Australian mortgage lending surged past expectations in July, with the number of owner occupier home loans rising 4.2 per cent.
Economists said the sharp upturn came a month earlier than they had expected. July's gains were led by two back-to-back interest rate cuts by the country's central bank, lowering the policy rate to a record low of 1 per cent, and an easing of lending rules by the prudential regulator.
In another sign Australia's housing market is coming back to life, preliminary figures on Monday showed auction clearance rate for houses in Sydney was above 80 per cent yet again while in Melbourne it was up a solid 76.6 per cent.
"These data suggest that recent rate cuts and the relaxation of mortgage serviceability requirements are boosting activity in the established housing market in a tentative sign that home loans may be turning around after a long decline," said NAB economist Kaixin Owyong.
Investors will keep an eye on separate surveys of business and consumer sentiment due this week to gauge whether the two rate cuts have propped up sentiment outside of housing.
New Zealand government bonds were slightly higher sending yields about 2 basis points down at the longer end of the curve.
Australian government bond futures were a tad higher, with the three-year bond contract up half a tick at 99.180. The 10-year contract added 5 ticks to 98.9550.