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USD Rises ahead of Powell Testimony; NZ Housing Measures Hit Kiwi

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The dollar rose in early European trading on Tuesday, in line with a riskoff tone in global markets, after a weak Asian session, led by declines in Chinese markets, while the New Zealand dollar plunged after new curbs on the housing market.

The United States, the European Union, Britain and Canada sanctioned Chinese officials on Monday over human rights abuses in Xinjiang, and Beijing hit back with punitive measures against European lawmakers, diplomats, institutes and families.

Also contributing to market caution was a third wave of the COVID19 pandemic in Europe. Germany is extending its lockdown and urging citizens to stay at home for five days over the Easter holidays, Chancellor Angela Merkel said.

At 0800 GMT, the dollar was up 0.2 against a basket of currencies at 91.989. The euro was down 0.3 against the dollar at 1.19025.

The common currency looks set to remain quite vulnerable on the back of virusrelated developments, ING strategists said in a note to clients.

The New Zealand dollar fell overnight and extended its losses as European markets opened, down around 1.4 at a threemonth low of 0.7059 versus the U.S. dollar.

The drop was triggered by the New Zealand governments introducing measures to curb speculation on its redhot housing market, where house prices have risen 23 in 12 months. The kiwi fell as the reforms lessened expectations for policy tightening.

The government measures will help to take pressure off the RBNZ Reserve Bank of New Zealand to…

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