WELLINGTON/SYDNEY, Jan 17 (Reuters) - The Australian dollar was slowly recovering on Monday in the wake of a further tightening by China which had knocked a cent off it last week on knee-jerk concerns the Chinese economy could slow and hurt demand for Australian commodity exports.
* Aussie claws back up to $0.9908, having fallen a cent to as low as $0.9856 on Friday. Support seen around $0.9842 with resistance up at $0.9994.
* The Aussie, which has been hit by heavy floods in the coal-exporting state of Queensland, was pressured because of the heavy exposure of the Australian economy to China. Slower Chinese growth could crimp demand for coal and iron ore, Australia's two top exports.
* China's central bank raised lenders' required reserves by 50 basis points on Friday, its seventh increase since early 2009 in a bid to keep up a fierce campaign against quickening inflation.
* Kiwi also tracked the Aussie lower to $0.7637 from $0.7698 in late Friday trade before steadying around $0.7680.
* Westpac says Aussie remains in a downtrend, but immediate direction will be dictated by breaks of either $0.9800 or $1.0020, while kiwi's corrective rally looks complete and likely to break below $0.7600 Monday.
* Equities higher, with JP Morgan's strong earnings pushing Wall Street higher. China's latest move to tighten credit drove gold to a one-week low, although oil prices rose.
* Commodities were intially hit by the China move but quickly rebounded and the CRB index ended flat. Iron ore made a fresh eight-month high with strong demand belying concerns over China.
* U.S. economic data was mixed but still painted a picture of a recovering economy.
* The euro had its best week in more than 1-1/2 years, after successful securities auctions by indebted euro zone members calmed fears of a credit crisis in the region.
* Euro zone ministers meet Monday and Tuesday amid hopes they will make some progress on enlarging the EFSF. ECB's Trichet calls for a larger fund.
* The Aussie extended its sharp retreat on the euro, down more than one cent to be near a 6-week low of A$1.3517, while the kiwi also weaker at NZ$1.7444.
* The Aussie near a seven-week low against the kiwi, holding around NZ$1.2898.
* Australian bond futures lower. The three-year contract 0.03 points down at 94.84, while the 10-year contract 0.025 points lower at 94.445.
(Australia/New Zealand bureaux) Keywords: MARKETS AUSTRALIA NEWZEALAND FOREX/BONDS (+61 2 9373 1800/+64 4 471 4234) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
* Aussie claws back up to $0.9908, having fallen a cent to as low as $0.9856 on Friday. Support seen around $0.9842 with resistance up at $0.9994.
* The Aussie, which has been hit by heavy floods in the coal-exporting state of Queensland, was pressured because of the heavy exposure of the Australian economy to China. Slower Chinese growth could crimp demand for coal and iron ore, Australia's two top exports.
* China's central bank raised lenders' required reserves by 50 basis points on Friday, its seventh increase since early 2009 in a bid to keep up a fierce campaign against quickening inflation.
* Kiwi also tracked the Aussie lower to $0.7637 from $0.7698 in late Friday trade before steadying around $0.7680.
* Westpac says Aussie remains in a downtrend, but immediate direction will be dictated by breaks of either $0.9800 or $1.0020, while kiwi's corrective rally looks complete and likely to break below $0.7600 Monday.
* Equities higher, with JP Morgan's strong earnings pushing Wall Street higher. China's latest move to tighten credit drove gold to a one-week low, although oil prices rose.
* Commodities were intially hit by the China move but quickly rebounded and the CRB index ended flat. Iron ore made a fresh eight-month high with strong demand belying concerns over China.
* U.S. economic data was mixed but still painted a picture of a recovering economy.
* The euro had its best week in more than 1-1/2 years, after successful securities auctions by indebted euro zone members calmed fears of a credit crisis in the region.
* Euro zone ministers meet Monday and Tuesday amid hopes they will make some progress on enlarging the EFSF. ECB's Trichet calls for a larger fund.
* The Aussie extended its sharp retreat on the euro, down more than one cent to be near a 6-week low of A$1.3517, while the kiwi also weaker at NZ$1.7444.
* The Aussie near a seven-week low against the kiwi, holding around NZ$1.2898.
* Australian bond futures lower. The three-year contract 0.03 points down at 94.84, while the 10-year contract 0.025 points lower at 94.445.
(Australia/New Zealand bureaux) Keywords: MARKETS AUSTRALIA NEWZEALAND FOREX/BONDS (+61 2 9373 1800/+64 4 471 4234) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.