By Cecile Lefort
WELLINGTON, Sept 14 (Reuters) - The Australian and New Zealand dollars popped higher on Monday, having proved resilient to another set of disappointing data out of China, with markets awaiting to see whether the Federal Reserve will finally start hiking rates later this week.
The Australian dollar AUD=D4 rose to a two-week peak of $0.7136, from $0.7080 late on Friday, pulling well away from a 6-1/2-year of under 69 cents touched last week.
It had already gained 2.6 percent last week, the largest such increase in two years and was last at $0.7117.
Dealers said the Aussie gained momentum after stops above 71 cents were triggered. Resistance was found at $0.7165, the 50 percent retracement of the $0.6892-$0.7440 move.
The Aussie crept higher against the yen to 85.79 AUDJPY=R , up four yen since it touched a trough last week.
Even soft Chinese data released over the weekend failed to stir investors. China is Australia's top export market.
Underpinning sentiment for the Aussie was data showing speculators trimming their net USD longs against the Aussie and Canadian dollars. ID:nL1N11H22Y
Still, leveraged funds remained heavily short the Australian dollar with investors awaiting the outcome of the Fed's two-day meeting on Sept 16-17. Markets are still guessing whether the central bank will hike rates then, or opt for December or early next year.
On the domestic front, focus will be on the release of the minutes to the Reserve Bank of Australia's September policy meeting on Tuesday. It will be followed by the central bank's semi-annual Parliamentary testimony on Friday.
"Since August, the commentary has been reflecting rising risks from China, and we expect the minutes and testimony to delve further into that issue as a key source of uncertainty surrounding the outlook," said Stephen Walters, chief economist at JPMorgan (NYSE:JPM).
Across the Tasman sea, the New Zealand dollar NZD=D4 had a firmer tone at $0.6333, from $0.6320 late on Friday, ahead of a heavy week with data.
Gross domestic product will be the highlight on Thursday with forecasts of a 0.5 percent increase for the second quarter and 2.5 percent for the year. Other events include dairy giant Fonterra's milk auction and current account figures both on Wednesday. ECONNZ
Kiwi resistance was found at $0.6381 with support at $0.6280. The kiwi dropped below 62 cents last month, a level not seen since 2009.
The kiwi managed to gain 0.7 percent last week despite an easing by the country's central bank and speculation of more. Economists forecasts another cut before the end of the year. NZ/POLL/
New Zealand government bonds 0#NZTSY= were largely flat with yields a touch softer on the long end of the curve.
Australian government bond futures were mixed, with the three-year bond contract YTTc1 off half a tick at 98.095. The 10-year contract YTCc1 was up 1.25 ticks to 97.2450.