Australia, New Zealand dollars vulnerable as Israel-Iran conflict escalates

SYDNEY, June 16 (Reuters) - The Australian and New Zealand dollars remained vulnerable to declines on Monday as the conflict between Israel and Iran showed no sign of cooling and oil prices climbed anew, although the sell-off in global stocks did steady a little.

The Aussie AUD=D3 dropped 0.3% to $0.6470, having fallen 0.7% on Friday to as low as $0.6457. It has support at the 200-day moving average of $0.6429, while resistance is stiff at $0.6550.

The kiwi dollar NZD=D3 was flat at $0.6008, after diving 0.9% on Friday to as low as $0.5996. It has support at 60 cents.

On Monday, Wall Street futures climbed slightly while currency markets were mostly calm as investors assessed the latest developments in the Middle East. Iranian missiles struck Israel's Tel Aviv and the port city of Haifa on Monday, destroying homes and fuelling concerns that it could lead to a broader regional conflict.

"The main influence on AUD/USD (this week) is likely to be the conflict in the Middle East and the FOMC meeting," said Joseph Capurso, head of international economics at the Commonwealth Bank of Australia, referring to the U.S. Federal Open Market Committee meeting starting on Tuesday.

"AUD/USD could fall nearer support at 0.6307 if the conflict escalates significantly."

Strategists from Deutsche Bank noted that the performance of the Australian dollar has a negative correlation with oil prices, even though Australia has become an energy exporter over recent years.

Australia will publish monthly jobs figures on Thursday where expectations are for a gain of 25,000 jobs in May and a steady jobless rate of 4.1%.

The labour market has been surprisingly resilient and another strong print could challenge market pricing for a rate cut next month, which is now priced at 75%.

New Zealand will release its first-quarter gross domestic product figures on Thursday where forecasts are for a solid quarterly growth rate of 0.7% as the economy emerged from a policy-induced downturn.

"Our 0.7% growth forecast is an upgrade from our previous estimate of 0.4%... The signs of strength in the sectoral data were something of a surprise for us," said Michael Gordon, senior economist at Westpac.

Swaps imply there might be just one rate cut left in the current easing cycle from the Reserve Bank of New Zealand, which is more than fully priced in by November. 0#NZDIRPR