Australian & NZ dollars battered by soft China PMI, Fed minutes

* Aussie & kiwi slide as soft Chinese PMI points to slowdown

* China is Australia & NZ's biggest export market

* Pair already on backfoot after Fed minutes

By Gyles Beckford

WELLINGTON, Feb 20 (Reuters) - The Australian and New Zealand dollars were battered lower after data showed Chinese manufacturing activity hitting a seven-month low and renewing concerns about the pace of growth in the biggest export market for the two Pacific economies.

The Aussie AUD=D4 tumbled the best part of half a cent to a one-week low of $0.8949, adding to the fall triggered by the Federal Reserve minutes, which showed policymakers would stick with the current pace of withdrawing stimulus at $10 billion a month.

The flash Markit/HSBC Purchasing Managers' Index (PMI) fell to a seven-month low of 48.3 in February from January's final reading of 49.5, with employment falling at its fastest pace in five years. News Search ID:nB9N0LF00D

"It's as you would expect, in recent weeks there's been increasing concerns about growth in China and the market was hoping for better, so this is a disappointment," said Bank of New Zealand strategist Kimberly Martin.

"In that sort of environment the Aussie gets hurt, and the kiwi has suffered from the contagion too."

The currency was already looking soggy, having struggled to sustain any moves above the year-to-date high in the $0.9080-90 area, which also marks the 38.2 percent retracement of its fall from October to January.

Initial Aussie support was seen at $0.8910, with resistance around $0.9010.

The New Zealand dollar NZD=D4 dropped to a two-week low at $0.8245 from $0.8275 after the Chinese data.

Near-term support for the kiwi was now seen at $0.8210/20 with resistance approaching $0.8300.

The Australasian currencies were also knocked lower on the cross rates, notching marked losses against the yen, euro, and sterling.

The kiwi did not fare as badly as the Aussie, which slipped against its trans-Tasman neighbour to NZ$1.0847 AUDNZD=R .

The BNZ's Martin said the Antipodean weakness could be expected to remain going into the European session.

Sentiment around the kiwi was unmoved by a flurry of data showing a lift in job advertisements, a fall in producer prices, and slight easing in consumer sentiment. Href="NewsSearch">ECI/NZ

New Zealand government bonds 0#NZTSY= were softer, sending yields 2.5 basis points higher along the curve.

Australian debt futures were also a touch down, the three-year bond contract YTTc1 down a tick at 96.990, while the 10-year contract eased 1.5 ticks to 95.905.

(Editing by Jacqueline Wong)

((Gyles.Beckford@thomsonreuters.com)(+64 4 802 7977)(Reuters Messaging: gyles.beckford.reuters.com@reuters.net))

Keywords: MARKETS AUSTRALIA/FOREX