Aussie, NZ dollar in focus: The Australian and New Zealand dollars appeared set to conclude a challenging week on a more stable note following unexpected softness in US retail data, which also provided support to bonds.

The Aussie held steady at $0.6517, maintaining its position for the week and comfortably above the three-month low of $0.6443. 

Notably, it encounters major resistance levels at $0.6543 and the 200-day moving average of $0.6567.

Similarly, the kiwi dollar was at $0.6104, showing minimal change for the week but above its trough of $0.6048. Resistance is anticipated around $0.6127 and $0.6158.

The New Zealand dollar experienced a brief dip after Reserve Bank of New Zealand Governor Adrian Orr refrained from discussing potential rate hikes in a speech earlier on Friday. 

Orr acknowledged the necessity of further efforts to lower core inflation while also expressing concerns about the risks associated with overly tight policy.

Andrew Boak, an economist at Goldman Sachs, interpreted Orr's comments as indicative of a passive stance on maintaining restrictive rates for the time being. Consequently, the probability of a rate hike this month diminished to just 21 per cent, while the likelihood of any rate increase this year dropped to 44 per cent, down from over 90 per cent last week.

Meanwhile, two-year swap rates eased to 5.095 per cent from a peak of 5.2475 per cent earlier in the week. In Australia, a soft jobs report prompted markets to factor in increased risks of rate cuts from the Reserve Bank of Australia (RBA), with a June easing now seen as a 50-50 proposition.

Futures suggest 36 basis points of cuts this year, compared to 25 basis points a few days ago. Three-year bond yields retreated to 3.767 per cent, having surged as high as 3.902 per cent earlier in the week.

Adam Boyton, head of Australian economics at ANZ, cautioned against reading too much into recent hiring trends, suggesting that employment is likely to rebound in February. 

He maintained ANZ's prediction for the RBA to delay rate cuts until November, although acknowledging the possibility of earlier action amidst shifting risks.

(With Reuters Inputs)