By Wayne Cole
SYDNEY, Aug 14 (Reuters) - The Australian and New Zealanddollars suffered a setback on Wednesday as disappointing Chineseeconomic data chilled some of the cheer caused by a temporaryeasing in the Sino-U.S. trade dispute.
The Aussie dollar eased to $0.6785, from anoffshore top of $0.6819, but kept above important support at$0.6750. A break of major resistance at $0.6822 is needed tokeep the bounce going.
The kiwi dollar drifted to $0.6450, from a peak of$0.6470, but again held above $0.6422 support.
Both had rallied overnight when U.S. President Donald Trumpbacked off his Sept. 1 deadline for 10% tariffs on remainingChinese imports, delaying duties on cellphones, laptops andother consumer goods, in the hopes of blunting their impact onholiday sales.
The reprieve prompted a pullback in the safe-haven yen,which saw the Aussie jump 2% to as high as 72.92 yen at onestage.
The mood turned sober, however, after China reportedindustrial output and retail sales both rose by much less thanexpected in July, reversing what had been a promisingimprovement in June.
In any case, analysts had been cautioning that nothing muchhad really changed in the standoff over tariffs.
"Markets have rallied on the notion that Trump has blinkedand is sensitive to falling stock markets," said TapasStrickland, a director of economics at NAB.
"But overall a high degree of scepticism should remain andan imminent deal is unlikely given Trump has foreshadowed he isgoing to be campaigning hard on the issue in the 2020 election."
Domestically, the latest Australian economic news was toomixed to change wagers on further rate cuts.
The official measure of wages slightly beat expectations byrising 0.6% in the June quarter, but that still left the annualpace at a sluggish 2.3%.
Wage growth shows no sign of accelerating above the 3% ratethat the Reserve Bank of Australia (RBA) has said is needed togive a much-needed lift to inflation.
More welcome was a 3.6% bounce in the Westpac measure ofconsumer confidence in August, and a substantial improvement insentiment toward the long-suffering housing market.
None of this was enough to shake investors' conviction thatthe RBA will have to cut rates again, with a move to 0.75% inOctober almost fully priced in. A further easing to0.5% is implied by February.
Australian government bond futures eased a touch on theSino-U.S. trade news, but were only just off historic highs. Thethree-year bond contract dipped 2 ticks to 99.335, whilethe 10-year contract fell 2.5 ticks to 99.0400.(Editing by Shri Navaratnam)