Australia, NZ dollars steady after tumble, gain on battered euro

SYDNEY, July 29 (Reuters) - The Australian and New Zealand dollars steadied on Tuesday, having tumbled overnight on worries that President Donald Trump's new trade deal with Europe could weigh on economic growth there, sending the euro sharply lower.

The Aussie AUD=D3 inched up 0.1% to $0.6528, having dropped 0.7% overnight to as low as $0.6513. It is now some distance away from a nearly 9-month top of $0.6625, but has support at 65 cents.

The kiwi dollar NZD=D3 was flat at $0.5973, after falling 0.7% overnight to mark the third straight session of declines. Resistance is now at 60 cents, while support is at $0.5906.

Overnight, leaders in France and Germany lamented the outcome of the U.S.-EU trade deal as a drag on growth, pulling down stocks and bond yields across the continent. The single currency slumped 1.3%, lifting the dollar broadly.

Trump also flagged a "world tariff" rate of 15% to 20% on all trading partners that were not negotiating a deal, among the highest rates since the Great Depression of the 1930s.

Philip Wee, a senior FX strategist at DBS Group, said the euro was initially relieved that the deal avoided a full scale tariff war between the U.S. and the EU.

"However, once markets absorbed the details, sentiment flipped from the reality that tariffs would still increase to 15% with the Trump administration still maintaining tariffs as a leverage tool."

The euro also gave ground on the Aussie EURAUD=R and the kiwi EURNZD=R, down 0.6% and 0.5% overnight.

Down Under, all eyes are on Australia's quarterly inflation reading on Wednesday, which will make or break the case for a rate cut next month. Forecasts are centred on a 0.7% quarterly rise in the policy relevant trimmed mean measure, a tad higher than what the central bank was expecting.

Markets are pricing in a 95% chance that the Reserve Bank of Australia will cut rates by a quarter point on August 12.

"We likely need +0.8 QoQ trimmed mean to materially knock pricing of an Aug RBA rate cut off kilter," said Ben Wiltshire, G10 Rates trading strategist.

"A 0.8 would test the assumption of sufficient structural disinflation."