By Cecile Lefort and Gyles Beckford
SYDNEY/WELLINGTON, Aug 19 (Reuters) - The Australian and New Zealand dollars struggled on Wednesday as sliding Chinese stocks added to fears about global growth, while investors awaited U.S. economic data.
The Australian dollar AUD=D4 was steady at $0.7339, still stuck in a narrow band of $0.7323 and $0.7409 seen in the past five sessions. It touched a six-year low of $0.7217 last week after China's central bank surprised markets by devaluing its currency.
China remained on the centre stage as a major stock market there .SSEC skidded 3.4 percent in early trade.
"The Shanghai Composite dropped over 6 percent this past session, once again casting into doubt the Chinese government's ability to maintain market stability," said John Kicklighter chief currency strategist at FXCM, referring to losses on Tuesday.
The market often uses the Aussie as a liquid proxy to hedge against weakness, or wager on strength, in China.
Also on investors' radar was U.S. inflation data and the minutes of the Federal Reserve's July policy review due later in the day.
Hourly resistance for the Aussie was found at the 10-day moving average around $0.7365 and $0.7385.
The pound held solid gains at A$2.1347, having jumped nearly 1 percent after a pick-up in UK inflation kept prospects of a Bank of England rate hike in play.
Across the Tasman sea, the New Zealand dollar NZD=D4 eased to $0.6585 as Chinese market jitters overshadowed a lift in dairy prices.
The commodity currency had been firm ahead of the latest Fonterra auction and it popped to a high of $0.6605 when there was a solid lift in prices, the first since mid-March, on reduced volumes.
The re-emergence of Chinese stock market weakness was seen challenging the kiwi.
"There's no reason for it to go up or to be positive ... the kiwi still needs to adjust lower and the Chinese stock market's 6 percent fall shows where the risks lie which is to the downside," said ANZ senior strategist Sam Tuck.
Near-term support for the kiwi is seen at $0.6555/60 with offers at $0.6620/30.
The currency was not bothered by data showing producer prices fell for the fifth consecutive quarter on weak dairy prices, leaving the Reserve Bank of New Zealand plenty of scope for further rate cuts.
New Zealand government bond yields were as much as 7 basis points higher.
Australian government bond futures fell, with the three-year bond contract off 1 tick at 98.050. The 10-year contract was down 3 ticks to 97.2000. (Editing by Jacqueline Wong)