(Add reaction after China data)
By Cecile Lefort and Charlotte Greenfield
SYDNEY/WELLINGTON, Jan 13 (Reuters) - The Australian and New Zealand dollars regained some ground on Wednesday after better-than-expected Chinese trade helped assuage, at least for now, concerns about the world's second largest economy.
The Australian dollar AUD=D4 was squeezed 0.6 percent higher to $0.7027, pulling away from the four-month low of $0.6927 touched on Monday. It rallied around 1 percent against the safe-haven yen and Swiss franc.
Most of the gains came after China reported a decline of 1.4 percent in December exports against an expected drop of 8 percent. Imports fell by 7.6 percent versus forecasts of 11.5 percent. encouraging was a 17.2 percent rise in imports of iron ore, Australia's top export earner.
The Antipodean currencies were already firmer following heavy intervention by Chinese authorities to stem the yuan's fall and stabilise its currency.
Resistance was found at the session's peak of $0.7049.
The Aussie is still down nearly 4 percent so far this year with investors worried that China could be losing its grip on managing the slowdown of its economy.
"The seemingly random series of (yuan) fixes, intervention in FX and equity markets and soft (China) PMI data has hit the Australian dollar hard," said Westpac in a note.
"This 'Trifecta of Trouble' looks like it has hit AUD into a new $0.68 to $0.72 range," it added. However, Westpac expects a stabilisation in the lower end of the range thanks to a healthy pipeline of mergers and acquisitions that will boost inflows.
The New Zealand dollar NZD=D4 rallied 0.5 percent to $0.6564 after the China trade data, but was still near an 8-week trough of $0.6509 set on Monday.
A private survey released on Tuesday showed prices for New Zealand's main commodities fell in December, with dairy prices down 3.5 percent. considerations continue to dominate trading with the rout in commodities, volatility in equities, and dislocation in the CNH market, of key focus," ANZ analysts said in a research note.
Analysts expected the Kiwi to trade between $0.6490 and $0.6580.
New Zealand government bonds 0#NZTSY= gained, sending yields 2.5 basis points lower along the curve.
Australian government bond futures were mixed, with the three-year bond contract YTTc1 reversing earlier gains to be down 2 ticks at 97.9900.
The 10-year contract YTCc1 was steady at 97.2150, while the 20-year contract YXXc1 added 3 ticks to 96.7600. (Editing by Simon Cameron-Moore and Sam Holmes)