By Cecile Lefort and Charlotte Greenfield
SYDNEY/WELLINGTON, Sept 2 (Reuters) - The Australian dollar plumbed fresh 6-1/2-year lows on Wednesday after a soft second quarter gross product report encouraged already-bearish speculators to sell even more aggressively.
The Australian dollar skidded as far as $0.6986, its lowest since 2009, to be last at $0.7018. It had already shed 1.4 on Tuesday following another stormy 24-hour session across the globe. Support was found at $0.6980.
Investors have been aggressive sellers of the Aussie in recent weeks in large part due to heightened concerns about a hard landing for the Chinese economy.
The latest blow was news that the economy grew a sluggish 0.2 percent in the second quarter, the slowest pace in two years and well short of forecasts for 0.4 percent.
"The good news is that Australia has avoided a negative GDP number but the bad news is that growth remains extremely weak," said Shane Oliver, chief economist at AMP Capital Investors.
"I think the door is wide open to cut rates despite what (the Reserve Bank of Australia) says. They will have to cut again."
Interbank futures were little changed, having already priced in a 25-basis point cut in the central bank cash rate by early next year, while the majority of economists see a steady rate outlook through 2016.
On Tuesday, the central bank kept rates at a record low of 2 percent, saying monetary policy needed to be accommodative as low interest rates were acting to support borrowing and spending.
Across the Tasman Sea, the New Zealand dollar NZD=D4 rose to a session high of $0.6357 after economic data suggested that the recent fall seen in New Zealand commodity prices may have slowed.
Also helping was an overnight bounce in dairy prices, up 10.9 percent to a 2-1/2-month peak.
The outlook for the kiwi, which touched six-year lows last week, is bearish with the Reserve Bank of New Zealand (RBNZ) expected to cut rates again to support slowing growth.
Markets have fully priced in that the RBNZ will cut rates by 25 basis points at its policy review next week and most economists anticipate a further cut by the end of the year.
New Zealand government bonds eased, pushing yields 1.5 basis points lower along the yield curve.
Australian government bond futures eased, with the three-year bond contract off 1 tick at 98.220. The 10-year contract was down 2.5 ticks to 97.3050.