Australian dollar recovers ground, central bank plays down jobs blow

* Aussie & kiwi up 0.6 pct vs USD so far this week

* RBA unperturbed by jobs data, noncommittal on currency

* Aussie resistance at 2014's peak of $0.9087

By Cecile Lefort and Naomi Tajitsu

SYDNEY/WELLINGTON, Feb 14 (Reuters) - The Australian and New Zealand dollars were heading for modest weekly gains on Friday after soft U.S. data dealt another blow to the struggling greenback.

The Aussie AUD=D4 was at $0.9006, having recovered a lot of the ground lost on Thursday following a surprisingly weak jobs report. News Search ID:nL3N0LH6PD

"You have to be encouraged by the rebound," said Sean Callow, a senior currency strategist at Westpac.

"If you are a bit concerned about the U.S. dollar and (you think) U.S. yields are likely to remain fairly low, then the Aussie is one of your better alternatives given the RBA (Reserve Bank of Australia)'s change in stance," he added.

U.S. retail sales fell unexpectedly in January and more Americans filed for jobless benefits last week, the latest signs the world's biggest economy started the year on a softer footing as bad weather took its toll. News Search ID:nL2N0LI0U4

The Aussie's recent strength came after the RBA last week shut the door on more interest rate cuts and scaled back its verbal campaign for a lower currency.

Markets largely expect the RBA to hold rates steady at a record low of 2.5 percent over the course of this year while interbank futures 0#YBA: imply only a one-in-ten chance of any further easing.

The Aussie found some support after RBA Assistant Governor Christopher Kent on Friday played down the disappointing jobs data, saying unemployment tended to lag economic activity.

The Aussie was up 0.6 percent so far for the week, having flirted with a one-month peak of $0.9068.

Also helping was a small bounce in iron ore prices

.IO62-CNI=SI , Australia's single biggest export earner. The mineral was last at $122 a tonne, up $2 in as many days.

Dealers cited resistance at $0.9050-65 ahead of a key barrier at this year's peak of $0.9087.

The New Zealand dollar NZD=D4 traded around $0.8345, having benefited from broad selling in the U.S. dollar due to weak data on retail sales.

Against the Aussie AUDNZD=R , it traded at NZ$1.0760, holding near a two-week high around NZ$1.0730 hit on Thursday.

The kiwi is on track to end the week 0.6 percent higher against the U.S. dollar, and hovers around the middle of the $0.8050-$0.8550 range seen since October.

The currency has been supported by expectations that New Zealand interest rates will begin rising next month, while the economy is seen outperforming in 2014.

It could push towards $0.8500 should the Reserve Bank of New Zealand start raising interest rates from a record low 2.5 percent in March.

Market participants say offers lined up between $0.8350-$0.8400 will restrain the kiwi's upside in the near term.

Further offers were suspected above $0.8400, while technical resistance lay at $0.8390, a trendline drawn from highs hit in October and January. Support was seen at $0.8274, its 100-day moving average.

New Zealand government bonds 0#NZTSY= inched up, prodding yields 1 basis point lower across the yield curve.

Australian government bond futures were holding above one-month lows having bounced on Thursday's soft jobs report. The three-year bond contract YTTc1 eased 1 tick to 96.980, while the 10-year contract added 1 tick to 95.890.

(Editing by Shri Navaratnam)

((Cecile.Lefort@thomsonreuters.com)(+61 2 9373-1234)(Reuters Messaging: cecile.lefort.thomsonreuters@reuters.net))

Keywords: MARKETS AUSTRALIA/FOREX