By Cecile Lefort and Swati Pandey
SYDNEY/WELLINGTON, Nov 6 (Reuters) - The Australian and New Zealand dollars were hampered by broad U.S. dollar strength on Friday ahead of a key jobs report that is expected to reinforce the case for a Federal Reserve interest rate hike in December.
The Australian dollar was steady at $0.7147, having wallowed in a narrow range in the past 24 hours. It briefly climbed to a peak of $0.7224 on Wednesday, but was on track to end the week unchanged.
The Aussie was a star performer against its kiwi cousin at NZ$1.0800, having jumped 2.7 percent this week. If sustained, it would be the largest such gain in 5 years.
The kiwi NZD=D4 was undermined by growing speculation of further easing by the Reserve Bank of New Zealand in December.
It was down 2.4 percent this week against the U.S. dollar, the largest drop since early September. It was last at $0.6607, not far from a one-month low of $0.6574 touched this week.
A break under there would bring 65 cents into focus.
The Aussie's inability to stay above 72 cents was partly due to strong chart resistance at $0.7225 and sliding prices of iron ore, Australia's top export earner.
But it was rising expectations of a Fed hike in December that stole the show, outshining a fairly optimistic outlook for economic growth by the Reserve Bank of Australia (RBA).
In its quarterly policy outlook, the RBA cited prospects for an improvement in economic conditions, while it cut its inflation forecast, giving room for an easing if needed.
Earlier this week the central bank skipped a chance to cut at its November policy meeting, leading investors to lengthen the odds on a move in December.
Market pricing implies only a 20 percent chance of a cut in December while it is fully priced for one by mid-year.
The focus is firmly set on a U.S. non-farm payrolls report with forecasts of a gain of 180,000 jobs in October.
"Upbeat data flow will firm up market expectations for the Fed to commence hiking rates in December, exerting downwards pressure on the AUD," said ANZ in a note.
Aussie support was found at the double bottom of $0.7105.
New Zealand government bonds had a soft tone.
Australian government bond futures extended losses to multi-week troughs, with the three-year bond contract off 2 ticks at 98.050. The 10-year contract shed 1.5 tick to 97.1650, while the 20-year contract eased 1 tick to 96.6100. (Editing by Shri Navaratnam)