Australian, New Zealand dollars set to end week on gloomy note

SYDNEY, March 21 (Reuters) - The Australian and New Zealand dollars are set to end the week on a downbeat note on Friday, as risk aversion swept across markets amid trade war uncertainties, though the kiwi managed to gain some ground against the Aussie.

The Aussie AUD=D3 was struggling at $0.6302, after falling nearly 1% overnight to a low of $0.6300. It's on track to end the week 0.3% lower, with resistance around $0.6390 and $0.6408.

The kiwi dollar NZD=D3 was at $0.5759, having dropped 1% overnight to as low as $0.5723. Although it remains well below the 2025 high of $0.5830, it is set to finish the week with a small gain of 0.2%.

Overnight, a bout of risk aversion gripped markets after the U.S. Federal Reserve indicated there was no rush to cut interest rates. The dollar rebounded from five-month lows, supported by concerns over the trade war and its potential negative impact on the economy.

The Aussie weakened 0.6% against the kiwi this week, dropping to NZ$1.0932 AUDNZD=R, just above the lowest level since early December, following a surprisingly weak jobs report. 0#AUDIRPR

After strong New Zealand GDP data on Thursday, Andrew Ticehurst, a senior economist at Nomura, raised his terminal rate forecast to 3.25% from 3.0%.

"With these developments, we are not inclined to fight the move lower in AUD/NZD, particularly given high NZ dairy prices, lower oil prices and what appears to be a large short investor positioning base in NZD."

Australia's government will unveil the federal budget on Tuesday, focusing on increased cost-of-living spending ahead of an election in May. The budget is expected to show a return to a deficit after two rare surpluses.

Monthly inflation numbers for February are also due on Wednesday where forecasts are for an annual rise of 2.5%.