By Stella Qiu

SYDNEY, Dec 5 (Reuters) - The Australian and New Zealand dollars scaled new multi-month highs on Monday, after more signs of China easing pandemic policies emerged and strong U.S. payroll data failed to shift expectations of a rate hike slowdown for the Federal Reserve.

Traders are now awaiting an interest rate decision from the Reserve Bank of Australia (RBA) on Tuesday. Many will be looking for signals of a coming pause, following indications in a new monthly consumer inflation gauge last week that inflation may have peaked.

The Aussie rallied 0.8% to $0.6849 AUD=D3 , its highest level since mid-September. It faces resistance at 68.5 cents.

The kiwi NZD=D3 was up 0.4% at $0.6436, its strongest level since August, after finishing last week with a 2.6% increase. Resistance is now around 64.5 cents.

Late on Friday, the U.S. dollar =USD initially gained after data on jobs and wage inflation were surprisingly strong in November, although it gave up gains as traders took profit amid expectations that the Fed would still slow down its pace of interest rate hikes this month.

"The temporary increase in the USD after the stronger than expected payrolls suggests the pressure on the USD is still down," said Joseph Capurso, a currency strategist at CBA.

"AUD/USD is a beneficiary of the loosening in global financial conditions and the easing of mobility restrictions in China though is finding significant resistance approaching 0.6850."

More Chinese cities on Sunday announced easing of coronavirus curbs after unprecedented protests against restrictions on the previous weekend.

State media also said conditions for China to downgrade its management of COVID-19 were improving as the coronavirus weakened.

The next big test for the Aussie is the RBA policy meeting. Markets have priced in a 70% probability for a 25 basis point hike from the meeting. Interest rates are seen peaking around 3.5%, down from an expectation of 4.1% just a month ago. O#RBAWTACH

The RBA has so far lifted rates by 275 basis points to a nine-year high of 2.85% to curb inflation.

"There will be intense focus on both the RBA decision and the tone of the statement. This seems likely to be the key for the Aussie this week, overshadowing Q3 GDP on Wednesday," said Sean Callow, currency strategist at Westpac.

"Otherwise, whether AUD/USD can take out the September highs around 0.6915 should depend on any further China Covid developments and the related tone of the US dollar."

Bonds, which barn-stormed last week, were largely steady on Monday. Australian 10-year yields AU10YT=RR stood at 3.379%, the lowest since August.
Reporting by Stella Qiu; Editing by Bradley Perrett