The Australian dollar was on track for its worst weekly performance in over two months on Friday, as some cautious investors took profits in one of the year's best-performing major currencies. The Australian dollar was a shade softer at $0.9762, down from $0.9779 seen late in New York. A few stop-loss sell orders lay below support at $0.9740, a break of which could extend losses to Oct 19 and 20 lows of $0.9662. For the week, the currency was down 1.1 percent, a modest decline but still its weakest week since August 15, a testament to how well it has done this year. It is the second best-performing major currency after the yen this year, having jumped 8.8 percent since January. Some traders said they wanted to take profits before next week, which may be a volatile ride for markets with central bank meetings in Australia, the United States, Britain and Europe. A tepid rise in domestic private sector credit was an additional drag as it argued for the Reserve Bank of Australia (RBA) to not raise interest rates at its Nov 2 meeting. After this week's tame inflation report, the RBA's meeting next week is seen to be a close call. Even though the central bank has said time and again rates would rise from 4.5 percent, many think it is in no hurry to tighten so soon. A Reuters poll of 20 analysts showed 14 thought there would be no hike. "With growth near trend, and inflation now back in the band, there's arguably little near-term urgency to move currently 'average' borrowing rates higher," said Scott Haslem, an analyst at UBS. But many analysts also said the RBA would not stay on hold for long. "With the economy picking up speed, fuelled by the high terms of trade, and with the faint whiff of intensifying price pressures due to an ever tightening labour market, we think an RBA non-move in November is only a reprieve," said Michael Blythe, an economist at Commonwealth Bank of Australia. Reflecting cooling bets for an RBA move next week, the implied yield curve steepened. Three-year Australian bond futures pared earlier gains to be flat at 95.08, while the 10-year contract was down 0.02 points at 94.764. The NZ dollar , which has outperformed its Aussie neighbour in recent sessions, was softer around $0.7538 after trading in a narrow $0.7527/55 range. Unlike the buoyant Australian economy, the New Zealand economy has struggled and recent data has pointed to rates being kept on hold until March next year. But the kiwi has risen about 4 percent since the start of the year, thanks to the global selldown in the U.S. currency. A mixed batch of NZ data on Friday did little for the currency, with the annual trade surplus widening slightly, while new building approvals edged up 0.5 percent, pointing to a subdued domestic economy. Markets are now awaiting next week's Federal Reserve announcement and NZ labour market data, which will shape the Reserve Bank of New Zealand's rate view. "But neither are likely to prompt a rate hike before March," said ANZ-National strategist David Croy. The Kiwi faced with stiff resistance near $0.7570, but was drawing support around $0.7500 from Thursday's RBNZ decision to keep rates on hold at 3 percent, but maintain a tightening bias, which allowed the market to firm up on March 2011 as the likely date for rates to rise again. The NZ government debt was steady, but short-term interest rate futures were lower on expectations of slow and gradual central bank rate rises.

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