SYDNEY/WELLINGTON, June 27 (Reuters) - The Australian and New Zealand dollars slipped on Wednesday as sharp losses in China's yuan only added to concerns about the possible impact of tariffs on global trade and growth.
The kiwi dollar NZD=D4 took an extra knock from a disappointing business survey and dropped as much as 0.6 percent to a seven-month trough at $0.6817.
That took it uncomfortably close to the $0.6781 low from last November, a break of which would take it back to territory last trod in mid-2016.
The Aussie dollar AUD=D4 dipped 0.1 percent to $0.7382, nudging it back toward recent 13-month lows at $0.7345.
Dealers said investors were selling the currencies in part as a liquid proxy for the Chinese yuan CNH=D3 which had fallen for 10 sessions in a row to touch six-month lows.
Escalating Sino-U.S. trade tensions have undermined both the yuan and Chinese stocks, clouding the outlook for the economy and its demand for Australian and New Zealand commodity exports.
Businesses in New Zealand already seemed to be unnerved with a survey by ANZ Bank reinforcing recent signs the country's economy was losing some of its gloss after years of strong growth. survey's headline measure showed a net 39 percent of respondents expected the economy to deteriorate over the year ahead in June, from 27.2 percent the previous month.
"It suggests the economy may continue gently losing steam over coming months, despite the support coming from fiscal stimulus and high commodity prices," said ANZ senior economist Liz Kendall.
The soft result only cemented expectations the Reserve Bank of New Zealand would leave rates unchanged at 1.75 percent at its policy review on Thursday. will still scrutinise the statement for any hints that new Governor Adrian Orr was pushing back his forecasts for a rate hike or considering cutting rates.
New Zealand government bonds 0#NZTSY= edged higher amid the general risk-off tone, nudging yields down 1.5 basis points across the curve.
Three-year Australian government bond futures YTTc1 was flat at 97.890, while the 10-year contract YTCc1 added half a tick to 97.3550. (Editing by Jacqueline Wong)