Australia, NZ dlrs fall as Trump ratchets up tariff threat

By Stella Qiu

SYDNEY, Feb 10 (Reuters) - The Australian and New Zealand dollars fell on Monday after U.S. President Donald Trump warned of imminent tariffs on all steel and aluminium imports, which dampened risk sentiment and buoyed the greenback.

The Aussie AUD=D3 hit a one-week low of $0.6230, but has since recovered most of the losses to be just off 0.1% at $0.6262. It now faces resistance at Friday's high of $0.6303 and January's high of $0.6330.

It finished last week 1% higher, rallying from a five-year trough when Trump launched the opening salvos in his trade war against Mexico, Canada and China.

The kiwi dollar NZD=D3 similarly fell to an intraday trough of $0.5637, but has since regained some of its posture at $0.5646, down 0.2%. It faces resistance at last week's high of $0.5702.

Trump said that he would announce 25% tariffs on all steel and aluminium imports into the U.S. on Monday and reveal other reciprocal tariffs on Tuesday or Wednesday.

Australia is not a major exporter of steel and aluminium to the U.S., but its top trading partner China will be subject to these new tariffs. Beijing's retaliatory tariffs on some U.S. goods came into effect on Monday with no signs of Trump speaking to Chinese President Xi Jinping.

The Aussie is often used by investors as a liquid proxy for China risk and to hedge against movement in the yuan CNH=D3.

Analysts at the Commonwealth Bank of Australia expect the local dollar could retest 61 cents again if global trade tensions escalate.

"Trade headlines will remain the biggest influence on AUD/USD this week. We consider optimism about a deal reached between the US and China will fade and weigh on AUD/USD," said Kristina Clifton, an economist at CBA.

Chinese data on the weekend showed consumer inflation accelerated to its fastest in five months in January largely due to the shift in timing for the Lunar New Year holiday, but producer price deflation persisted.

For the week ahead, Australia will have the Westpac consumer sentiment survey and the NAB business survey on Tuesday, although they are unlikely to move market expectations for a rate cut next week.

Traders put the chance of a quarter-point easing from the Reserve Bank of Australia next Tuesday at 95%. 0#AUDIRPR

The data calendar in New Zealand is light this week until its central bank meeting next Wednesday. The Reserve Bank of New Zealand is widely expected to slash interest rates by an outsized 50 basis points in the face of a gloomy economy.