By Charlotte Greenfield and Naomi Tajitsu
SYDNEY/WELLINGTON, July 10 (Reuters) - The Australian and New Zealand dollars continued to gain on Friday, recovering from a sell-off earlier in the week as Greece put forward new reform proposals and Chinese stocks rebounded for a second session.
The Australian dollar rose 0.4 percent to $0.7478 AUD=D4 and away from a six-year low of $0.7372 hit on Wednesday, but was still down 0.45 percent for the week.
The Aussie's gains against the safe-haven yen were even more marked, rising 0.95 percent to 91.15 AUDJPY=R and off a trough of 89.13.
"From a perfect storm of negatives that we were suffering from at the beginning of the week when the Aussie went below 74 cents briefly, we're looking at the other side of that now - so it's no surprise we're up near 75," said Ray Attrill, global co-head of FX strategy at NAB.
China shares rebounded sharply for a second day on Friday as a fresh round of government support measures stemmed panic selling. ID:nZZN2RHV00
Both Antipodean currencies, particularly the Aussie, are often used as liquid proxies for China plays.
The Greek government will ask for parliament's approval on Friday to negotiate on the text of "prior actions" that could form the basis of a cash-for-reforms deal with creditors, a government source said. ID:nL8N0ZP24Q
The New Zealand dollar NZD=D4 edged up 0.2 percent to a session high of $0.6772, as rebounding global share markets eased risk aversion and lifted the higher-yielding currency further away from a five-year low of $0.6620 hit on Tuesday.
The kiwi is poised to end the week 1 percent higher versus the greenback, earning a reprieve after 11 consecutive weeks of losses. The kiwi has been battered by slowing economic growth which prompted a cut in interest rates last month.
Market participants see a risk that the kiwi's correction may extend towards $0.7000 in the near term. Technical resistance loomed around $0.6870-$0.6890, which contains the 23.6 percent retracement of the kiwi's 14 percent slide since May, and the 50 percent retracement of its 2009-2014 rally.
New Zealand government bonds 0#NZTSY= sold off broadly. Yields on the 2027 bond 0#NZG0427= rose 9.5 basis points to 3.52 percent as demand fizzled following a strong auction in the maturity the previous day.
Australian government bond futures also eased as demand for safe-haven assets waned. The three-year contract YTTc1 eased 8 ticks to 98.020 , while the 10-year contract YTCc1 lost 13 ticks to 97.0200.