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Aussie & NZ dollars bob up, BOJ eyed

Thursday, 4 Oct 2012 | 10:20 PM ET

WELLINGTON/SYDNEY, Oct 5 (Reuters) - The Aussie and New Zealand dollars bobbed up on Friday, as risk aversion eased after the European Central Bank said it was ready to buy bonds of troubled euro zone countries, while markets awaited the outcome from a Bank of Japan policy meeting.

* The Aussie dollar at $1.0264 from $1.0240 early, moving some distance away from a one-month trough of $1.0182 hit on Thursday.

* The local currency's reluctance to remain below $1.0200 is frustrating Aussie bears and forcing them to cover shorts.

* Traders say flows are very thin ahead of U.S. non-farm payroll data due out later on Friday. Talk of sellers around $1.0275 with buyers near $1.0210.

* Key support found at $1.0165, the September low, with Tuesday's trough of $1.0298 seen capping the topside.

* Antipodeans taking advantage of improving risk appetite after the European Central Bank said overnight it was ready to buy bonds of troubled euro zone members.

* The New Zealand dollar bobs up to $0.8229, after rebounding from a near one-month low of $0.8165 overnight.

* Kiwi is down nearly 1 pct this week, but for now looks set to remain in range between $0.8165 and around Thursday's high of $0.8233.

* Aussie still on track to post a fall of more than 1 pct in a week that saw the Reserve Bank of Australia (RBA) cut its cash rate by 25 bps to a 3-yr low of 3.25 pct and leave the door open to more easing.

* Interbank futures pricing in a 62 pct chance of a 25bp cut next month with OIS markets showing 83 basis points worth of easing over the next 12 months.

* Aussie under pressure following subdued retail sales data at home, falling commodity prices and global growth worries, particularly China, Australia's biggest export market.

* Iron ore shipments to China from Australia's Port Hedland, a bellwether for Chinese industrial activity, fell by 9.5 pct in September, port authority data showed. Australia is China's single largest source for imported iron ore, followed by Brazil.

* Euro near three-month highs against the Aussie at A$1.2684 , showing a jump of 2.3 pct for the week, its largest such gain since February. Euro at NZ$1.5805 , having risen to NZ$1.5894, its highest since Sept 18.

* Antipodeans firm against the yen with investors focused on the outcome of the Bank of Japan's Oct 4-5 policy meeting due between 0330-0530 GMT. BOJ is under heavy political pressure to ease again.

* Aussie off one-year lows against the kiwi. Last at NZ$1.2461 , from a trough of NZ$1.2361 earlier this week.

* U.S. non-farm payrolls data due later on Friday, with expectations for 113,000 jobs to be added with the jobless rate rising a tick to 8.2 pct.

* New Zealand government bonds extend earlier softness, sending yields as much as 6 basis points higher.

* Australian government bond futures give back this week's hefty gains. Three-year contract slips 0.06 points to 97.620, having touched 97.750, its highest since late July. The 10-year contract eases 0.07 points to 97.050, from 97.190.

((Australia/New Zealand bureaux)(+61 2 9373 1800/+64 4 802 7980))

Keywords: MARKETS AUSTRALIA NEWZEALAND/FOREX