Aussie dlr off lows on equity bounce, NZD edges up

* Aussie retail sales show some softness

* Markets show 64 pct chance of rate cut next month in Australia

* ECB, BOE, BOJ meetings eyed By Mantik Kusjanto and Cecile Lefort

WELLINGTON/SYDNEY, Oct 4 (Reuters) - The Australian dollar bounced off one-month lows against its U.S. counterpart on Thursday, helped by stronger equities and position adjustments, while the New Zealand dollar edged up as well.

The Aussie dollar last traded at $1.0226, up from $1.0200 in early trade, after buying from macro-funds below $1.0200 forced some short-covering, traders said.

The Aussie was also aided by a bounce in the S&P futures index , which rose 0.5 percent.

Earlier, it fell as low as $1.0182, its weakest since Sept.6 when data showed Australian retail sales rose a meager 0.2 percent in August, versus forecasts of a 0.4 percent gain.

The Aussie has fallen 1.5 percent so far this week, with much of the pressure coming from an interest rate cut on Tuesday that took some in the market by surprise.

The Reserve Bank of Australia (RBA) eased by 25 basis points, citing a darker global background, falling export prices and a high currency.

Investors are convinced of more easing with interbank futures pricing in a 64 percent chance of a cut to 3.0 percent next month. The market has 93 basis points worth of easings factored in over the next 12 months.

Sue Trinh, a senior currency strategist at RBC Capital Markets in Hong Kong, believes that markets are too aggressive in pricing in those cuts and was not surprised by the Aussie's bounce from $1.0182.

"With expectations already so low, we really need significant downside to domestic data to see sustained weakness in the Aussie," she said, forecasting a total easing of 50 basis points over the next 12 months.

Key support is found at $1.0165, the September low.

Other data out in Australia showed approvals to build new homes rose 6.4 percent in August, but that followed a steep 21 pct plunge the month before and did nothing to change the subdued outlook for home construction.


The New Zealand dollar edged up $0.8211, from $0.8178 early, with markets focused on the upcoming policy meetings of the European Central Bank, Bank of England and Bank of Japan.

Support was found at the Sept. 24 and 26 double low at $0.8184, ahead of $0.8140, with the topside capped at $0.8265.

Against the kiwi, the Aussie recouped some losses, trading last at NZ$1.2448 , up 0.2 percent from NZ$1.2423 on Wednesday. It hit a one year low of NZ$1.2361 earlier this week.

The kiwi has risen 3.3 percent against the Aussie over the past month, partly helped by a bounce in dairy prices. It is also underpinned by a steady rate outlook in New Zealand, in contrast to the prospect of lower rates in Australia.

"The kiwi is not yet 'expensive' according to fundamentals, despite the speed of the recent rally," said Bank of New Zealand strategist Mike Jones, pointing to his fair-value estimate for the kiwi of between 80 and 82 Aussie cents (NZ$1.2195-NZ$1.25).

New Zealand government bonds fell, sending local yields up to 8.5 basis points higher in the long end.

Australian government bond futures ran into profit-taking, having rallied to two-month highs on Wednesday. The three-year contract slipped 0.06 points to 97.680 from a peak of 97.750. The 10-year contract also eased 0.06 points to 97.120, having leapt to 97.190.

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