Aussie, NZ dlrs keep nerve after China hike

WELLINGTON/SYDNEY: The Australian and New Zealand dollars held up well on Thursday as a stronger Wall Street supported risk sentiment, offsetting worries about the impact from another China rate hike and renewed strains in EU debt markets.

Aussie dollar holding at $1.0694, having slipped as far as $1.0656 at one stage from $1.0723 in late local trade.

The Aussie has resisted pressure even after the Reserve Bank of Australia on Tuesday gave a less upbeat outlook for the local economy, which reinforced expectations that it'll remain on the sidelines for longer.

Focus now on Australia jobs data at 0130 GMT where a weak result could see the Aussie finally break through exporter and Asian central bank bids at $1.0660 to test $1.0611.

Forecasts are for a rise of 15,000 in employment with the jobless rate steady at 4.9 pct .

The NZ dollar shade softer at $0.8270, after easing as far as $0.8245 from $0.8284 in local trade. The kiwi likely to test support at $0.8200 as the euro looks wobbly.

Kiwi saw brief pressure after report of a 7.8 earthquake struck in the Pacific Ocean north east of the country. But the NZ civil defence authorities has cancelled its tsunami warning.

Euro down broadly as yields spreads widen in the EU . Euro slips 0.8 pct to test big support at A$1.3378 .

China's hike, the third this year, makes clear that taming inflation remains a top priority even as its vast economy cools a little. For details, see

Aussie weighed because of the heavy exposure of the Australian economy to China. Slower Chinese growth could crimp demand for coal and iron ore, Australia's two top exports. For NZ, China is the second-biggest trade partner after Australia.

US stocks finished higher, rebounding from a weak open, while the CRB commodity index and US crude oil fell. But gold, a safe haven, rose 1 pct.

Latest US data showed growth in the vast services sector still sluggish as new orders fell, but a steady employment reading pointed to job growth later in the year.

NZ Q1 GDP data has been delayed to July 14 because NZ statistics agency needs more time to analyse the figures.

NZ govt bonds track Treasury higher on fears of contagion in Europe, with local yields a touch softer.

Australian bond futures also firmer, with the three-year contract up 0.04 points at 95.290 and the 10-year gaining 0.03 points to 94.810.

Copyright Reuters, 2011