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SYDNEY: The Australian and New Zealand dollars struggled on Wednesday after key Chinese data for August disappointed, reinforcing worries about slowing global growth.

The risk-sensitive Aussie was little changed at $0.7326 at 4:31 GMT, after dipping earlier as a raft of Chinese data showed factory and retail sales growth cooled more sharply than expected last month,

The Kiwi was slightly lower at $0.7097 after touching a two-week low of $0.7074. The next test level for the antipodean currency is around $0.7050 and resistance sits around $0.7151.

Stock markets, to which both currencies are sensitive, were lower in Asia following the Chinese data and as investors fretted over the still-dominant pandemic and tapering of central banks’ stimulus.

“A jump in cases in Fujian province this week suggests the recovery might be held back. There is also a risk of fresh disruptions to supply chains given that the province is a major trade hub.”

Bond yields continued their downward trend after data on Tuesday showed inflation was cooling in the Unites States, raising fresh questions on when the U.S. central bank will begin tapering its asset purchases.

Australian 10-year yields fell almost five basis points to 1.213 narrowing the gap against equivalent U.S. yields to seven basis points.

Unlike the U.S. Federal Reserve and the Bank of England, the Reserve Bank of Australia is not expected to hike interest rates next year.

Across the Tasman, where the Reserve Bank of New Zealand is expected to hike rates next month amid an increasingly tight labour market and overheated housing market, bond yields fell 5-to-6 basis points at the short end of the curve, and about 7-to-10 basis points at the longer end.

The bonds, which were issued at a yield of 2.857%, on Wednesday were bid at a yield of 2.713%.

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