Australian, NZ dollars wobble as Trump's Greenland tariffs hit sentiment

By Stella Qiu

SYDNEY, Jan 19 (Reuters) - The Australian and New Zealand dollars wavered on Monday as U.S. President Donald Trump's threat of tariffs on eight European countries over Greenland rattled global stocks and boosted demand for safe-haven currencies.

In early Asian trade, data showed that the economy of China, the biggest trading parter of Australia and New Zealand, grew 4.5% year-on-year in the fourth quarter, slightly above expectations. For the full year, it expanded 5%, hitting Beijing's target.

The Aussie was last down 0.1% at $0.6684 AUD=D3, having touched a session low of $0.6668 during early Asian trade. Key support lies at $0.6660, with resistance around $0.6727 and $0.6766.

The kiwi was last up 0.2% at $0.5764 NZD=D3, after slipping to as far as $0.5738 earlier in the session. Support lies at $0.5712, with resistance at $0.5810.

Moves were marginal, however, as investors sold the U.S. dollar and purchased mainly the Japanese yen and Swiss franc after Trump threatened a 10% import tariff on goods from eight European countries from Feburary 1 until Washington is allowed to buy Greenland.

"AUD/USD will consolidate near current levels of 0.6700 with a risk of sustained losses because of the latest spat between Europe and the United States," said Joseph Capurso, head of international research, Commonwealth Bank of Australia.

The local jobs data, often volatile, could bring some upside surprises for the Aussie on Thursday, said Capurso, adding that a strong result could boost market pricing for a rate hike next month and lift the Aussie to $0.6767.

Forecasts point to an increase of 30,000 jobs in December, with the unemployment rate expected to edge higher to 4.4% from 4.3% in the previous month. Investors are pricing in a 27% chance that the Reserve Bank of Australia will raise the 3.6% cash rate by 25 basis points on February 3, rising to 76% by May. 0#AUDIRPR

Across the Tasman Sea, New Zealand will publish its fourth‑quarter consumer price index on Friday. Economists polled by Reuters expect a 0.5% quarterly rise, keeping annual inflation at 3%, the upper end of the central bank's 1%–3% target band.

"Continued strength in imported inflation, exacerbated by a weaker Kiwi dollar, is the main culprit," said Jarrod Kerr, economist at Kiwibank. "While the release on Friday will show some annoying hot spots of lingering inflationary pressures the underlying trend should still be one of disinflation."

Markets imply almost no chance of a rise in the 2.25% cash rate at RBNZ's next meeting on February 18, with little prospect of a move until at least September. 0#NZDIRPR