WELLINGTON/SYDNEY, Oct 11 (Reuters) - The Australian dollargained on the greenback on Thursday as a strong employment gainwas matched by more people looking for work sending the joblessrate to a two-year high, keeping expectations for lower rates inAustralia in play.
* Australian employment easily beat expectations, rising14,500 vs forecasts for 3,750 jobs. But jobless rate surprisedby rising to 5.4 pct, highest since April 2010, from 5.1 pct inAugust and above forecasts of 5.3 pct.
* The Aussie jumped up more than a third of cent toa near one-week high of $1.0266 from $1.0223 before the data,before steadying around $1.0250.
* Interbank futures imply rates at 3 percent byDecember with a better than even chance of a cut next month, butexpectations were trimmed after the data.
* Earlier, Aussie lifted by firmer iron-ore prices, bringing gains this week to nearly 13 pct. Ithas recouped half of the huge fall suffered in July and August.
* Aussie seen testing resistance around $1.0275, then$1.0295, with support holding around Oct 9 low of $1.0175.
* NZ dollar last at $0.8158, from $0.8173 beforethe job data, pressured by cross buying in Aussie against thekiwi .
* Aussie/kiwi pair last NZ$1.2550, after hitting NZ$1.2573,highest reading in almost two weeks. The cross hit a one yearlow of NZ$1.2361 just last week.
* Solid kiwi support against greenback at around $0.8150,and more sturdily at $0.8234, while $0.8190 continues to cap thetop side.
* Kiwi down 1.7 pct vs the greenback so far this month, vsAussie's 1.4 pct drop. Aussie has narrowed its losses with thepullback in iron-ore prices.
* Kiwi unmoved by subdued local data. A manufacturing surveyshows activity nudges higher in September but remains incontraction for a fourth consecutive month.
* In addition, consumer confidence dips for a second monthin October, a monthly survey shows. Latest food price indexpoints to benign inflation, with prices down, all pointing to asteady rate outlook into next year. See
* NZ Finance Minister Bill English reiterates the governmenton track to return to budget surplus in three years. Marketshave been uncertain about the goal after he did not specificallyrepeat the plan in the government's 2011/12 financial statementon Wednesday.
* NZ government bonds softer, with yields up 1basis point along the curve. Still, solid demand for NZ bonds atthe latest auction.
* Australian government bond futures higher with three-yearcontract up 0.010 points at 97.640, and the 10-yearcontract 0.05 point higher at 97.065.
((Australia/New Zealand bureaux)(+61 2 9373 1800/+64 4 8027980))
Keywords: MARKETS AUSTRALIA NEWZEALAND/FOREX