Australia, NZ dollars mark time as investors wait for US government to reopen

SYDNEY, Nov 12 (Reuters) - The Australian dollar marked time on Wednesday as investors wait for the U.S. government to reopen, while its run to a 12-year high against the kiwi due to diverging rate outlooks in Australia and New Zealand has led to some profit-taking.

The Aussie AUD=D3 slipped 0.1% to $0.6520, having also eased 0.1% overnight. It has risen past the key 65-cent level on hopes of an imminent end to the U.S. government shutdown, but it is running into resistance around $0.6540.

Reserve Bank of Australia Deputy Governor Andrew Hauser said on Wednesday there was increasing debate about whether the current cash rate of 3.6% is restrictive enough to keep inflation in check.

He told Reuters that a spike in consumer sentiment in the Westpac survey seemed a bit "erratic" and the central bank wanted to spend time to see if it persisted before giving it too much weight.

Adding to signs that financial conditions might not be that restrictive, data on Wednesday showed a large lift in new housing loans in the third quarter, driven by a nearly 18% jump in investor lending,

"This solid pace is consistent with the easing in monetary policy earlier in the year working its way through the economy," said Ashwin Clarke, an economist at the Commonwealth Bank of Australia.

"It also will provide marginal support (for) the RBA's bias of no further cuts in the near term."

On Thursday, Australia will release the monthly jobs figures. Analysts are expecting jobs to grow by 20,000 in October and a dip in the unemployment rate to 4.4% from 4.5%.

Any unexpected weakness could add to the case for one more rate cut in May, which is currently priced at just 60%. 0#AUDIRPR

The kiwi NZD=D3 was also 0.1% lower at $0.5648, after rising 0.1% overnight to as high as $0.5670. The recovery from a seven-month low of $0.5606 does not seem solid yet, with much depending on a rate decision from the Reserve Bank of New Zealand later this month.

The RBNZ is widely expected to cut interest rates by 25 basis points to 2.25% on November 26, with a 10% risk that it may surprise with a half-point cut like it did in October.

The Aussie's strong run against the kiwi to a 12-year high hit some profit-taking, with it holding at NZ$1.1540 AUDNZD= on Wednesday, a touch below the recent top of NZ$1.1589.