SYDNEY, Jan 3 (Reuters) - The Australian and New Zealand dollars were pinned near two-week lows on Wednesday as a rally in global risk sentiment stalled at the new year, with traders bracing for U.S. jobs data which could break or justify bets of aggressive policy easing.
The Aussie AUD=D3 eased 0.1% to hit a two-week low of $0.6751, after falling 0.7% overnight in the biggest daily drop in a month. It now has support around $0.6720 and resistance is around $0.6806.
The kiwi dollar NZD=D3 also touched a two-week trough of $0.6246, having dived 1.1% overnight. Support is around $0.6230.
Overnight, global shares retreated from their highs and the U.S. dollar was underpinned by a rise in Treasury yields as traders trimmed their bets of early and aggressive U.S. interest rate cuts for the year ahead.
The CME FedWatch Tool is estimating a 21.4% chance that U.S. rates will remain steady in March, from a 11.4% chance on Dec. 29.
Nomura said on Wednesday it was exiting its trade recommendation for a long position in the Australian dollar against the euro and the U.S. dollar that it suggested for Nov. 10, booking a 5% return, adding that sluggish China growth and slowing local economy would suggest caution.
"AUD indeed performed well over November/December, but is now coming into a period where it has performed less strongly, historically," said Andrew Ticehurst, a rates strategist at Nomura.
Market focus is now on the minutes for the December U.S. Federal Reserve policy meeting due later in the day and the closely watched U.S. non-farm payrolls report on Friday.
Australian bonds extended a global sell-off in the new year, with the benchmark ten-year government bond yield AU10YT=RR up 3 basis points to 4.051%, after a rise of 6 bps on Tuesday.
Three-year yields AU3YT=RR rose 5 bps to 3.708%. Swaps are back to suggest there is a slim chance of 8% of a rate hike from the Reserve Bank of Australia in February, but the most likely outcome would be a move lower in August, followed by another cut in November.
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