By Stella Qiu

SYDNEY, May 6 (Reuters) - The Australian dollar notched a new four-year top on Wednesday as global stocks rallied on hopes that a peace deal to resolve the Middle East conflict could be reached soon, while the kiwi closed in on a two-month high.

U.S. President Donald Trump said on Tuesday he would pause an operation to help escort ships through the Strait of Hormuz, which had threatened a fragile ceasefire in the Gulf. He also cited progress towards a comprehensive agreement with Iran, fuelling hopes the war could be ending soon.

Often seen as a proxy for global risk, the Aussie AUD=D3 rose 0.8% to $0.7240, the strongest level since June 2022. Bulls are eyeing the next resistance level of $0.7283, with support solid at 71 cents.

The New Zealand dollar NZD=D3 also rallied 0.7% to $0.5927, but is running into some resistance at $0.5929, a level that it has failed multiple times to break in the past month. It was up 0.3% overnight.

"While the operation could again be ‘un-paused’, we expect President Trump to prioritise preserving the ceasefire because of the steep economic and political costs of the ongoing conflict," said Madison Cartwright, a senior geo-economics analyst at the Commonwealth Bank of Australia.

"We continue to expect a resolution by the end of May or shortly thereafter."

In New Zealand, data showed the jobless rate unexpectedly fell to 5.3% in the first quarter from a decade high of 5.4%, but employment missed expectations with a gain of just 0.2%, suggesting that the labour market remained weak.

That did little to move the rate outlook for the Reserve Bank of New Zealand. Swaps imply just a 34% probability that the RBNZ could hike in May but a move by July is fully priced in as the Iran war raised inflation risks.

In its report on financial stability, the RBNZ said the financial system remained resilient amid heightened global risks, although it was likely to see a somewhat slower economic recovery that could affect job growth.

Across the Tasman Sea, swaps imply there is an around 20% probability that the Reserve Bank of Australia could hike again in June after three rate hikes this year offered policymakers space to monitor how the Iran war plays out.

However, the National Australia Bank surprised by calling for another rate rise in June after the decision on Tuesday, arguing that the cash rate of 4.35% is still not restrictive enough.

"A terminal cash rate of 4.6% would see the real cash rate around 1% by year end, and close to 1.5% by the middle of 2027. These are elevated levels for the real cash relative to historical experience and we think would reflect restrictive monetary policy," their analysts said in a note.