The New Zealand dollar is little changed, dragged off its highs after National Australia Bank said it will be raising interest rates on its mortgage products by between 12 and 15 basis points to respond to sustained increases in funding costs there.

The kiwi was trading at 67.86 US cents at 5pm in Wellington, down from the day’s high of 68.10 cents and from 67.90 cents at 8:30am. The trade-weighted index eased to 73.62 points from 73.66.

National Australia Bank, which owns Bank of New Zealand, had held off raising its mortgage rates after its competitors, Westpac, ANZ Bank and Commonwealth Bank of Australia, which owns ASB Bank, raised their mortgage rates by similar amounts last September.

“The thinking there is that it might push the Reserve Bank of Australia closer to a rate cut if the market’s pushing rates up,” says Martin Rudings, a foreign exchange dealer at OMF.

That took the gloss off the Australian dollar after a solid jobs report earlier today showed employment grew faster than expected in December, pushing the unemployment rate down to 5 percent, its lowest level since early 2012.

New Zealand’s Reserve Bank has proposed forcing the New Zealand subsidiaries of the big four Australian banks to nearly double their equity capital, a proposal out for consultation until March 29 and a measure that would likely drive up lending rates here.

“If the reserve banks don’t want tighter conditions because of that, the only thing they can do to counter that is to cut rates,” Rudings says.

The kiwi is trading at 95.26 Australian cents, up from 95.07cents this morning.

The New Zealand currency had been buoyed by inflation data out yesterday that was deemed to make a further rate cut here less likely.

In the background, the same factors that have been dogging global markets for months ground on, including concerns about Britain’s Brexit process, worries about how the United States and China will resolve their trade conflicts and nervousness about the economic impact of the US government shutdown, now in its 33rd day.

“They’ve been going on for too long – we’re all getting migraines just waiting for something to happen,” Rudings says.

The US Senate is about to vote on two measures which could end the shutdown, but neither is expected to pass.

Because of this backdrop, “the market’s still thinking about lower global growth this year and the IMF keeps lowering its forecasts,” Rudings says.

The New Zealand dollar is trading at 51.90 British pence from 51.94 this morning, at 59.60 euro from 59.13, 74.33 yen from 74.40 and 4.6044 Chinese yuan from 4.6102.

The two-year swap rate is trading at 1.9132 percent from 1.9179; the 10-year swap rate is at 2.5800 percent from 2.5950.

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