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The Australian dollar was on the back foot following data showing the biggest yearly drop in building approvals in six months.

Approvals were down 19.9 per cent in the 12 months to the end of March, tumbling from a 4.9 per cent fall in February, according to data from the Australian Bureau of Statistics.

This was well below expectations among economists for a 10 per cent fall, and was the biggest drop since last October, when approvals fell by almost a quarter.

The monthly rate, which can be volatile, was down 13.4 per cent in March from February’s 8.9 per cent gain. It was the first decline since December, and the biggest month-on-month drop since November 2015.

In recent months, regulators have ratcheted up efforts to tame house price growth, which remains strong in Sydney and Melbourne in particular. The country’s prudential regulator at the end of March said it would introduce a new suite of macroprudential rules to target risky lending – namely interest-only loans – by banks.

The Australian dollar was down 0.4 per cent at $0.7395, making it the second-worst performing major currency on Monday behind a 0.6 per cent decline for South Africa’s rand.

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