The Kiwi plunged by more than 1.2% against the US dollar in early Asian trade after the Reserve Bank of New Zealand proposed to tighten mortgage lending rules in a step to curb the overheated housing market and pave the way for more monetary policy easing in August.

Although inflation rate remained below 2% since 2012, house prices skyrocketed by almost 50% in the past 6 years, which is seen as a major risk to the financial system if prices are due to correct. The new proposal will not only control prices from further booming but will allow the bank to cut its official cash rate further below 2.25%, and I believe this step could come as early as Aug 11 when the central bank meets next.

The Aussie was the second biggest decliner today, dropping by 1% against the greenback. The minutes revealed from RBA’s July meeting at which they kept interest rates unchanged at 1.75% showed the central bank isn’t really worried from Brexit as it’s expected to have only a modest adverse effect on global economic activity.

“Members noted that the direct effect on the Australian economy was likely to be quite small, given that only around 3% of Australia’s exports went to the United Kingdom and around 4.5% went to the rest of the European Union.”

Investors focus will shift to Australia’s Q2 CPI release on Wednesday July 27, as only a weak release could trigger a rate cut in August considering that policy makers are less worried on what’s happening in Europe.

Overall I remain bearish on the commodity currencies bloc as Fed members are slowly building up expectations for tightening this year and softer commodity prices will only increase the pressure on high yielding assets.

The pound has been moving in a relative tight narrow range early today after it received a boost Monday from the announcement of a large M&A deal, which to some extent reassured that U.K. could still attract foreign direct investments even though it’s departing from the EU. A start of a busy U.K. data calendar kicks off today with the release of June’s CPI, PPI, and ONS house price index. Although the figures won’t reflect the full impact from the Brexit vote, bears are on standby to jump in if data surprised to the downside. I still prefer shorting rallies on GBPUSD for a potential dip below 1.3 in the short term.