Rates At 0520 GMT Latest Change AUD/USD 1.0320 +0.18% AUD/JPY 79.205 +0.04% 6.25% Apr, 2015 3.3060% +0.1050 5.50% Apr, 2023 4.0479% +0.0825 10-Yr Spread To U.S. +182 bps -2 bps SFE Mar 3-Year Futures 96.73 -0.12 SFE Mar 10-Year Futures 96.105 -0.09 SYDNEY (Dow Jones)--The Australian dollar gained steadily on Friday, boosted in part by strong bond auctions in Spain and Italy tempering concerns. While the currency gained, bonds dropped on both ends of the curve, with interest-rate futures ratcheting down some more aggressive bets on the likelihood of interest rate cuts from the Reserve Bank of Australia. Late Friday, that market had priced in a 3.5% cash rate by June, down from the current 4.25% level, largely thanks to the still-heightened European debt issues. Even so, there was a reprieve of that on Friday in Asian trading after the bond auctions by Spain and Italy and after the European Central Bank said there was talks of "tentative signs of stabilization in activity at low levels." Richard Grace, chief currency strategist at Commonwealth Bank of Australia in Sydney, said the positive lift to the Australian dollar would likely follow-through in European and U.S. trading on Friday. He noted that several developments in the fixed income market -- such as the price differential between the two-year bond spreads of the U.S. and some other large nations -- were combining to weigh on the U.S. dollar. "The Aussie is likely to finish a little bit stronger on the week," said Grace, noting the potential for more gains from the highly correlated euro would also help the Australian dollar. Grace tipped likely resistance for the Australian dollar at its 200-day moving average of US$1.0413. At 0520 GMT, the Australian dollar was trading at US$1.0320, up from US$1.0301 late Thursday. Against the Japanese yen, the Australian currency changed hands at Y79.205, up from Y79.1725. As traders in Australia ratcheted down their RBA interest rate cut expectations, much of the local focus next week will turn to the heavily watched December jobs report on Thursday. At Australia and New Zealand Bank economists are worried the data could provide a weakening picture. "With low employment growth occurring elsewhere in the economy, a smaller than normal intake of Christmas casuals in retail is likely to translate into negative employment growth in this survey this month," they said, while forecasting Australia's unemployment rate to rise to 5.4% in December from 5.3% the month before. -By Geoffrey Rogow, Dow Jones Newswires; +61-2-8272-4686; geoffrey.rogow@dowjones.com (Data provided by Reuters)

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