Australia dlr pinned near lows vs USD, China GDP offers small reprieve

* China data offers tiny reprieve

* Aussie at 3-month lows vs yen, Pound near 2009 peaks vs Aussie

* Australian bonds futures at multi-month highs

By Gyles Beckford and Cecile Lefort

SYDNEY/WELLINGTON, Jan 20 (Reuters) - The Australian dollar hovered near 3-1/2-year lows against its U.S. counterpart on Monday, with further pressure heaped on the currency by a surging yen.

The Aussie AUD=D4 slipped to a low of $0.8756, the weakest since July 2010, from $0.8775 in early trade. It was last at $0.8800.

A batch of data out of China, Australia's single biggest export market, offered some consolation after GDP data came in a touch above forecasts. The economy of Asia's giant grew 7.7 percent in the fourth quarter vs forecasts of 7.6 percent.

News Search ID:nB9N0K200W

"The Aussie popped 25 pips at the most... Traders are still looking to sell rallies at present," said David Scutt, a trader at Arab Bank Australia.

He said the next big level lower could be dictated by Australia's inflation figures due on Wednesday. ECONAU

"People talk about 85 cents, even the Reserve Bank of Australia discussed 85 cents," he said.

Charts suggest more vulnerability ahead with solid support found around $0.8700 and a break below could see it test $0.8600.

The Aussie dollar came under pressure earlier in the session due to a strong yen and falling Nikkei. The Aussie dropped as far as 91.00 AUDJPY= , the lowest in three months and nearing solid support around 90.89-91.00 yen.

A break below could see a retracement to 86 yen set in August. It was last at 91.36.

Pound was another star performer following upbeat British retail sales. It peaked at A$1.8746 GBPAUD=R , a level not seen since 2009 and showing a gain of more than 20 cents since a low in October.

Across the Tasman sea, the New Zealand dollar NZD=D4 was marking time in subdued trade ahead of inflation data due on Tuesday.

The currency was sitting around $0.8260 after a hefty 1 percent decline on Friday when investors booked profits on the Aussie-NZD, which scaled an eight year-high.

However, attention is fixed on fourth quarter inflation numbers, which are expected to show consumer prices eased 0.1 percent on the previous quarter, for an annual rate of 1.5 percent. Href="NewsSearch">NZ/POLL

The inflation numbers are the last substantial data before next week's Reserve Bank of New Zealand interest rate review. An upside surprise is seen by some as a possible trigger for the bank to start the long awaited tightening cycle. News Search ID:nL3N0KP000

"If market participants' perceptions after the CPI (consumer price index) data are that a January hike is unlikely, the softening in the NZ dollar seen late last week is likely to continue over the week ahead," ASB Bank economists said in a market note.

The chances of a rate rise next week are put at one-in-four. The RBNZ is seen more likely to be raising rates in March, with 100 basis points of tightening this year, as it looks to get ahead of the curve to keep the lid on inflation pressures in the strongly growing economy.

Near term support for the kiwi is seen at $0.8240 and more substantially at $0.8210, with resistance emerging towards $0.8300.

Activity was thinned by a public holiday in the Wellington region.

New Zealand government bonds 0#NZTSY= were largely unchanged.

Australian government bond futures rose to multi-month peaks. The three-year bond contract YTTc1 gained 1 tick to 96.140, having climbed to a four-month high of 97.160. The 10-year contract added 2 ticks to 95.975.

(Editing by Shri Navaratnam)

((Cecile.Lefort@thomsonreuters.com)(+61 2 9373-1234)(Reuters Messaging: cecile.lefort.thomsonreuters@reuters.net))

Keywords: MARKETS AUSTRALIA/FOREX