SYDNEY: The Australian and New Zealand dollars were marking time ahead of the all-important US non-farm payrolls data on Friday, which could add to the case interest rates will stay high for longer and trigger renewed selling in bonds.

The Aussie was little changed at $0.6375, having rebounded 0.7% overnight to $0.6377 and moved further away from its 11-month low of $0.6286.

It was still down 0.9% for the week, with resistance lying at about 64 cents.

The kiwi was hovering at $0.5965, holding onto overnight gains of 0.9% to $0.5966, the highest in three days. It is down 0.6% for the week, with major resistance at 60 cents and support at $0.5871.

Economists expect the US economy added 170,000 jobs in September and the jobless rate ticked lower to 3.7% - any upside surprises may trigger another leg up in Treasury yields and boost the US dollar.

Overnight, San Francisco Fed President Mary Daly said the Fed can afford to keep rates steady as long as labour market cools, and the recent surge in long-term bond yields is doing the tightening job for the Fed.

Locally, the semi-annual Financial Stability Review from the Reserve Bank of Australia showed global risks are elevated, including stress in China’s property sector, but Australian households and businesses have been resilient.

Australia, NZ dollars get much-needed bounce, outlook still bearish

“The RBA does caution, and we agree, that employment remains key to households’ resilience. A sharp rise in unemployment would test the resiliency of the household sector,” said Stephen Wu, an economist at the Commonwealth Bank of Australia.

Australian government bonds extended gains on Friday, with the three-year yields falling 4 basis points (bps) to 4.008% and 10-year yields easing 2 bps to 4.562%.