By Stella Qiu
SYDNEY, Dec 9 (Reuters) - The Australian and New Zealand dollars trended higher on Friday as a slight rebound in global stocks bolstered risk sentiment, although the pair could come under pressure as markets look to upcoming central bank meetings including the Federal Reserve.
The Aussie hit a four day high of $0.6801 after advancing 0.6% overnight. However it failed to sustain above 68 cents, giving back earlier gains to stabilise around $0.6781.
The kiwi rose 0.2% at $0.6393, the third straight days of gains. It faces resistance around Tuesday's top of $0.6441 and support is around 63 cents.
Both were aided by a rebound in Asian shares and a rally in commodity prices as iron ore surged 4.5% to the highest since June 16, and coking coal and rebar futures climbed more than 3%.
China is easing its zero-COVID policy, with Premier Li Keqiang expecting the shift in COVID policy would allow the country's economy to pick up pace.
A day earlier, a top-level party meeting pledged to focus on stabilising growth while optimising the pandemic measures.
"Risk sentiment improved with little data of note but more pledges from China to boost growth," said Sean Callow, a strategist at Westpac.
The U.S. dollar lost 0.3% against a basket of major currencies.
Apart from China optimism, investors are focused on U.S. producer price inflation figures later in the day for more signs about the health of the U.S. economy. U.S. monthly consumer inflation data is due next week, along with the last policy decision this year from the Federal Reserve.
Futures have priced in a near-certain possibility that the Fed will slow down its rate hike to 50 basis points next week, and expect the target U.S. federal funds rate would peak around 4.9% by next May.
"How much central banks will decide - or be forced - to hike ultimately comes down to the inflation outlook over time, which depends in part on near-term inflation expectations moving back in-line with central banks' targets," said analysts at J.P. Morgan.
"Policy makers cannot rest easy with near-term inflation expectations remaining at their current elevated levels, even if longer-tern expectations look to be contained."
Yields on Australian government bonds fell to the lowest level since late August this week. The yield on 10-year bonds fell by 7 basis points to 3.300%, and the yield on three-year notes dropped 5 bps to 3.027%. (Reporting by Stella Qiu; Editing by Stephen Coates)