By Wayne Cole
SYDNEY, Jan 20 (Reuters) - The Australian and New Zealand dollars marked time on Monday as markets awaited key data due later in the week which could decide whether interest rates in both countries might be cut anytime soon.
The Aussie was a fraction firmer at $0.6876 AUD=D3 , but bound by chart support around $0.6850 and resistance at last week's top of $0.6933.
The kiwi dollar idled at $0.6615 NZD=D3 , well within last week's trading range of $0.6586 to $0.6664.
Both face major data hurdles this week with the Australian labour report due on Thursday and New Zealand consumer prices (CPI) the day after.
The jobs number could be critical for whether the Reserve Bank of Australia (RBA) cuts rates at its Feb. 4 policy meeting given the central bank's board highlighted risks to employment at its December meeting.
Median forecasts are for a rise of 15,000 net new jobs, following November's surprisingly large gain of 39,900, with unemployment staying at 5.2%.
"A repeat of the strong November outcome could be enough to convince the RBA that the 'gentle turn' in the economy is continuing," said ANZ's head of Australian economics David Plank.
"It would offset some of the data pointing the other way, such as weak consumer spending in Q3 and the recent decline in consumer confidence."
Plank, however, looks for an increase in jobs of just 5,000 for December
"If we couple this with the downward pressure on the RBA's economic forecasts from soft consumer spending, then a February rate cut is the likely result," he added.
Consumer confidence has taken a hit in recent weeks as bushfires swept through the east of the country and swathed major cities in harmful smoke.
That has left the market split on whether the RBA will go as early as February, with futures 0#YIB: implying a chance of around 46%. A quarter-point easing to 0.5% is almost fully priced by May, however.
The three-year bond future YTTc1 were at 99.245, implying a yield of 0.755%, while the 10-year contract YTCc1 stood at 98.8050.
New Zealand's CPI is forecast to have risen 0.4% in the December quarter, nudging annual inflation up to 1.8% from 1.5% but still leaving it below the middle of the Reserve Bank of New Zealand's (RBNZ) 1-3% target range.
"Further lifts in underlying inflation will give the RBNZ confidence that keeping the cash rate unchanged at 1% is about right," said Jarrod Kerr, chief economist at Kiwibank.
"However, inflation is certainly not guaranteed to settle around 2% over the medium term...there remains hesitancy and caution among firms."
The market has all but given up on a near-term rate cut with a move in February put at just a 7% chance RBNZWATCH . An easing by June is seen as a 33% probability. (Editing by Shri Navaratnam)