SYDNEY/WELLINGTON, March 6 (Reuters) - The Australian andNew Zealand dollars edged up on Tuesday as investors wageredthat U.S. President Donald Trump's threatened tariffs might notprove as disruptive as first feared, reviving the appetite forrisk.
The Aussie dollar AUD=D4 crept up 0.2 percent to $0.7780,off last week's two-month trough at $0.7713, supported by abounce in Asian share markets as Trump faced growing pressurefrom political and nation-state allies to pull back fromproposed steel and aluminium tariffs. MKTS/GLOB
There was little reaction to the Reserve Bank of Australia'swidely-expected decision to leave interest rates at 1.5 percent,but there were concerns the Aussie could come under pressure asthe RBA sounded a cautionary note on growth at its monthlypolicy meeting. would expect to see some softening in the Aussie asmarkets digest what appears to be a tweak in the RBA's GDPgrowth forecast over the next couple of years from 'to average abit above 3 percent' to 'faster in 2018 than it did in 2017',"said Westpac's head of financial market strategy, Robert Rennie.
Figures due Wednesday were forecast to show Australia'sgross domestic product (GDP) expanded by around 0.6 percent inthe December quarter. But following recent disappointingeconomic indicators, analysts are now looking for a rise ofaround 0.5 percent, with annual growth slowing to 2.4 percent.
Data out Tuesday was too mixed to provide much of a lead.
Retail sales for January disappointed with a rise of 0.1percent, versus analysts' expectations of around 0.4 percent.
The country's current account deficit also widened by morethan expected in the December quarter to A$14 billion ($10.89billion), while net exports shaved 0.5 percentage points fromGDP which was a little less than forecasted.
On the bright side, government spending rose strongly in thequarter and lessened the risks of a major downside surprise forthe full GDP report.
Futures markets 0#YIB: continue to price in only a minimalchance of a rise in rates by August and a 50-50 probability byyear-end.
The kiwi dollar NZD=D4 firmed 0.15 percent to $0.7235,slowly edging away from its recent low at $0.7186.
"The NZD remains a by-stander amidst more interesting globaldevelopments ... Price action over the past six weeks or soshows some pretty well-defined technical ranges, with keysupport at $0.7175 and resistance at $0.7440," Jason Wong,markets strategist at BNZ Bank, said in a research note.
More action was expected from a dairy auction due to takeplace in the early hours of Wednesday morning. Analysts expectprices for the country's top export, whole milk powder, to fallaround 2 percent, which could weigh on the kiwi.
New Zealand government bonds 0#NZTSY= eased, sendingyields 4.5 basis points higher at the long end of the curve.
Australian government bond futures slipped in line withTreasuries. The three-year bond contract YTTc1 eased 4 ticksto 97.885, while the 10-year contract YTCc1 lost 7 ticks to97.2000. ($1 = 1.2857 Australian dollars)