By Swati Pandey and Charlotte Greenfield
SYDNEY/WELLINGTON, Sept 13 (Reuters) - The Australian dollar fell on Tuesday as waning appetites for high-yielding, riskier assets overshadowed positive economic data from China.
The Aussie AUD=D4 slipped 0.25 percent to $0.7545, trading near a key chart support. A breach below that level could see it testing $0.7490, a level last seen on Aug.31.
"The data from China came in roughly around the same level as prior reads, so could be considered as neither hot or cold," said Matt Simpson, senior analyst at ThinkMarkets in Melbourne.
Fears of a sharp slowdown in China have dissipated in recent months but analysts say it would take a run of upbeat news to convince investors the economy was taking off again.
China's industrial output grew 6.3 percent in August from a year ago, compared with 6.0 percent expansion in July while retail sales for last month beat expectations. noted that the Aussie "is down on the yen which makes sense as the latter is likely to be attracting safe haven flows."
The Aussie slipped for a second session to reach 76.78 yen AUDJPY= with investors cutting back on carry trades ahead of crucial meeting of the Bank of Japan next week.
The Australian dollar could re-test a key resistance level of 77 U.S. cents again this month should the Federal Reserve not hike U.S. rates at its meeting next week, said Westpac senior market strategist Imre Speizer.
If the Fed tightens in December, the commodity-linked currency could drop to 74 U.S. cents, he said.
The New Zealand dollar NZD=D4 was also weaker on Tuesday, at $0.7344. It gained 0.4 percent on Monday.
Investors were turning attention to New Zealand data with the current account balance due on Wednesday, economic growth on Thursday and a consumer confidence survey on Friday.
"Traders will be reluctant to sell the currency ahead of what is expected to be a bumper Q2 GDP release on Thursday," said Jason Wong, currency strategist at BNZ Bank.
A poll by Reuters showed economists expect gross domestic product to rise 1.1 percent compared to the first quarter, and by 3.7 percent from a year earlier.
The Kiwi was also given support from a jump in food prices which could lift inflation a little, though much of the increase was from a spike in banana prices. Zealand government bonds 0#NZTSY= eased, sending yields 1.5 basis points higher at the long end of the curve.
Australian government bond futures were mixed, with the three-year bond contract YTTc1 unchanged at 98.42. The 10-year contract YTCc1 rose 1.25 ticks to 97.945.
Traders expect bond prices to weaken on sluggish demand from foreigners for Australian government bonds, a reflection of their declining yield advantage. (Editing by Richard Borsuk)