Australia, NZ dollars unsettled by US broadside in global trade war

SYDNEY, July 11 (Reuters) - The Australian dollar eased from eight-month highs on Friday after U.S. President Donald Trump fired another round in his global trade war, slugging equities and souring risk sentiment.

The threat of tariffs of 15% to 20% on most trading partners was a further blow, as Australia and New Zealand had been facing just a 10% levy. Analysts noted such high tariff levels were above those from the Great Depression and would risk a slowdown in U.S. and global growth.

"The AUD is vulnerable to any fresh global growth downgrade, which we'd judge to be a distinct risk if the tariffs take effect," said Ray Attrill, head of FX strategy at NAB.

"They are collectively more draconian than the 10% baseline, plus various sector specific tariffs, likely assumed in many current forecasts."

Australia is heavily reliant on free trade for its commodity exports and the Aussie faded 0.1% on the news to $0.6583 AUD=D3, and off a new peak of $0.6595. Support lies around $0.6540 and $0.6485.

The kiwi dollar also lost 0.1% to stand at $0.6025 NZD=D3, off a top of $0.6043. Support comes in around $0.5978.

The Aussie fared better against the Japanese yen to reach a five-month high of 96.46 yen AUDJPY=. Japan faces broad U.S. tariffs of 25%, which have already been imposed on its auto exports, putting pressure on the yen to depreciate to offset the hit to company earnings.

The Aussie had been supported by a pullback in expectations for local rate cuts after the Reserve Bank of Australia wrongfooted investors on Tuesday by holding rates at 3.85%.

Markets now imply a total further easing of 75 basis points, down from near 100 basis points at the start of the week.

A cut is still seen as likely for August, though much depends on the outcome of consumer price figures for the second quarter due on July 30.

A rise of 0.6% or 0.7% in core inflation would likely be a green light for an August cut, but anything higher could put it in jeopardy. 0#AUDIRPR

The Reserve Bank of New Zealand this week matched market wagers by holding rates at 3.25%, though it left the door wide open to a cut in August should the economy perform as expected.

Markets imply a 65% chance of a move next month, and around a 50-50 chance of a further move to 2.75%. 0#NZDIRPR