By Swati Pandey and Charlotte Greenfield
SYDNEY/WELLINGTON, Feb 10 (Reuters) - The Australian dollar rose on Friday after the country's central bank provided an optimistic view of the economy, bolstering views that further interest rate cuts were off the table.
Solid trade data from China, Australia's main export customer, also helped.
The Australian dollar AUD=D4 firmed 0.4 percent the day's high of $0.7658, but stayed in a narrow trading band of 76-77 U.S. cents.
The Aussie is facing stiff chart resistance at 77 U.S. cents, failing to breach the level four times in recent days. Gains were also capped by the greenback broad strength following U.S. President Donald Trump's declaration that he would announce a tax reform plan in the next few weeks.
The Aussie is set to end the week 0.5 percent lower.
Earlier, the Reserve Bank of Australia (RBA) predicted the economy would rebound smartly following a shock contraction in the third quarter of last year while headline inflation was seen at 2 percent in early 2017. took the upbeat outlook as a sign that further cuts in interest rates were off the table, pushing the Aussie higher.
The Aussie also got a lift after China posted a 25 percent jump in imports in January. Iron ore imports were the second highest on record while coal imports soared 64.4 percent over last year.
Elsewhere, The Aussie rose 0.65 percent on the yen AUDJPY=R and 0.2 percent on its New Zealand counterpart. Both the euro and the pound fell about 0.2 percent on the Aussie EURAUD=R GBPAUD=R .
The New Zealand dollar NZD=D4 added 0.2 percent on the greenback to $0.7198, after hitting a 2-1/2 week low of $0.7185 on Thursday.
It was headed for its largest weekly drop since mid-December after the Reserve Bank of New Zealand (RBNZ) held its official cash rate steady at 1.75 percent, and flagged it could remain there for two years or more. Kiwi continues to languish in the wake of yesterday's very neutral RBNZ monetary policy statement," said David Croy, senior rates strategist at ANZ.
"Fair enough too, with the Governor warning that the rates market had gotten a bit too far ahead itself pricing in so much tightening," Croy added.
New Zealand government bonds 0#NZTSY= eased, sending yields 5 basis points higher at the long end of the curve.
Australian government bond futures fell, with the three-year bond contract YTTc1 down 5 ticks at 98.040. The 10-year contract YTCc1 slipped 5.5 ticks to 97.275. (Editing by SImon Cameron-Moore)