Australia, NZ dollars under pressure as US tariffs loom

SYDNEY, March 31 (Reuters) - The Australian and New Zealand dollars were flat to slightly weaker on Monday, with risk sentiment depressed ahead of an imminent U.S. announcement on tariffs and a central bank meeting in Australia that may give clues on the direction of rates.

The countries' bonds rallied along with their global peers, with yields on the shorter end of the curve hitting their lowest in almost six months as investors fled to safe-haven assets ahead of U.S. President Donald Trump's announcement on reciprocal tariffs on April 2.

The Aussie AUD=D3 was flat at $0.6286, having finished last week 0.3% higher. It is on track for a quarterly gain of 1.6% but has been confined in recent weeks to a relatively narrow range between $0.6260 and $0.6330.

The kiwi dollar NZD=D3 inched 0.1% lower to $0.5712, after ending last week 0.2% lower. It is headed for a quarterly gain of 2.2%, with resistance at the 21-day moving average of $0.5730.

Trump said late on Sunday that reciprocal tariffs due to be announced on Wednesday would essentially hit all countries, dashing hopes of some in the market that the levies would be limited.

On Tuesday, the Reserve Bank of Australia will decide on its latest policy move. It is widely expected to hold the cash rate at 4.1% but some analysts are looking for a softening of its hawkish language that might open the door for a rate cut in May.

"AUD/USD can test $0.62 this week if financial markets materially downgrade the global economic outlook in response to a new U.S. tariff regime and the RBA strikes a dovish tone," said Kristina Clifton, an economist at the Commonwealth Bank of Australia.

Swaps imply just an 18% probability that the RBA will move on Tuesday, while an easing in May is about 70% priced in. For all of 2025, the markets are expecting three rate cuts, although the RBA has indicated it may not be cutting that much.

The RBA will also release its semiannual Financial Stability Report on Thursday.

Australia's sovereign bonds rallied, with three-year Australian government bond yields AU3YT=RR tumbling 11 basis points to 3.668%, the lowest since early October. Two-year New Zealand bond yields NZ2YT=RR slid 9 bps to 3.525%, also the lowest since October.