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Australia, NZ dlrs Hold Gains, House Prices Run Hot

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SYDNEY, March 11 Reuters The Australian and New Zealand dollars clung to gains on Thursday after a tame reading on U.S. inflation provided a reprieve to risk appetite, while data on local housing markets stunned with its strength.

The Aussie was holding at 0.7725, having survived multiple tests of support around 0.762025 this week. Resistance lies at 0.7745, followed by a gap to 0.7810.

The kiwi dollar edged to 0.7191 and away from the weeks trough at 0.7103, which now marks strong support. It faces resistance at 0.7200 and 0.7267.

Their U.S. counterpart was undermined by a soft reading on core U.S. inflation which saw Treasury yields ease back and calmed jitters in risk assets.

For Australia and New Zealand the prices that matter right now are for houses, and they are decidedly not soft.

Figures from New Zealand on Thursday showed national house prices jumped 5.2 in February, to be up a staggering 21.5 on a year earlier. You have to go back to the apex of the last nationwide property boom in 2004 to see house price appreciation this high, said Jeremy Couchman, a senior economist at Kiwibank.

Part of the jump was likely a byproduct of buyers rushing to beat the May 1 reimposition of loantovalue restrictions on investors by the Reserve Bank of New Zealands RBNZ.

The boom has sparked calls for the central bank to raise interest rates from record lows, though so far it is resisting such pressure in favour of macro prudential rules.

Couchman said the bank was…

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