The Aussie stood at $1.0615, barely changed from late New York levels, having retreated from a session high of $1.0640. Still, it has surged some 7.5 percent from a low of $0.9862 in December. The pace and magnitude of recent gains as well as Europe's unresolved debt crisis could make the Aussie vulnerable to bouts of profit taking. Analysts at Barclays Capital said they expect the Aussie to retreat to $1.0300 in one month, but held on to a positive medium-term outlook. Data on Wednesday showed manufacturing activity in both China and Australia improved in January. A key reading on US manufacturing is due later Wednesday. However, they did little to alter views that Beijing will continue a pro-growth policy stance and interest rates in Australia will likely be cut next week. "Reserve Bank policymakers won't be getting too excited about the latest reading on the manufacturing sector, however the improvement is encouraging," said Savanth Sebastian, economist at CommSec. "But with the Aussie dollar holding well above parity against the greenback despite all the concerns about Europe, manufacturers still have headwinds to contend with," he said, adding he expected the central bank will cut rates. Interbank futures imply a 60 percent chance of a 25 basis point cut to the 4.25 percent cash rate on Feb 7. Australia's Prime Minister Julia Gillard said the local currency is likely to stay relatively high for some years, noting the strength of the economy and demand for mineral resources had helped push up the value of the currency. Traders said the Antipodeans have been in demand since the Federal Reserve pledged to keep rates near zero for longer and kept the door open to more stimulus. That has encouraged the use of the dollar as a funding currency for carry trades, a positive for high-yielding assets. Australian bond futures were a tad firmer with the three-year contract up 0.02 points at 96.880. The 10-year contract re-tested a record high of 96.300 first set in December, before ceding a bit of ground to last stand at 96.260, up 0.043 points on the day. STALLING The New Zealand dollar stood at $0.8234, a shade below its New York close. It had hit a high of $0.8301 overnight, the best since mid-September. After being the leader of the pack in recent sessions, it softened under mild profit-taking and some softness against the Aussie, although the Chinese PMI data helped to give it a floor. "Sustained risk appetite could see the NZ dollar retest resistance at $0.8300," said BNZ strategist Mike Jones, adding that support was around $0.8190. The kiwi came off its highs against the euro, but at NZ$1.5869 it was still in sight of the record low of NZ$1.5806 set on Tuesday. The Antipodeans were also lower against the resurgent yen, with the Aussie at 80.88 yen from 81.07 yen, while the kiwi eased to 62.72 yen, but off last week's high of 63.83. The Aussie pushed up around 0.3 percent against the kiwi to NZ$1.2889 after slipping to a three-month low of NZ$1.2814. There is little local data to affect the kiwi for the rest of the week, although the outcome of dairy giant Fonterra's latest auction overnight may be influential at the edges. New Zealand government bond prices rose sharply as investors were a shade more cautious after soft US data. Local yields closed up to 7.5 basis points lower.