New Zealand dollar sags after RBNZ disappoints bulls

* NZD under pressure after RBNZ keeps rates on hold

* Aussie pinned near lows by EM rumbles, drop in China PMI

By Naomi Tajitsu and Cecile Lefort

SYDNEY/WELLINGTON, Jan 30 (Reuters) - The New Zealand dollar hit a one-month low on Thursday after the Reserve Bank of New Zealand kept official interest rates on hold, disappointing some investors who had been betting on the chance of a rate rise.

The Australian dollar also struggled as investors turned risk averse again and a private reading on Chinese manufacturing touched a six-month low. News Search ID:nB9N0K2024

The kiwi NZD=D4 tumbled nearly a full U.S. cent to its lowest since early January at $0.8174 after the RBNZ held rates at a record low of 2.5 percent. News Search ID:nL5N0L2052

The announcement sparked broad selling, pushing the kiwi down roughly a yen to an eight-week low around 83.35 yen

NZDJPY=R , while the Aussie AUDNZD=R rose a full cent to an intraday high around NZ$1.0665.

Against a currency basket =NZD , the kiwi slumped to 77.42, its lowest since early January.

"Going into the meeting, the market was pricing in as much as a 35 percent chance that the RBNZ would hike rates today and as they didn't hike ... that pricing had to be taken out of the market," said Kymberly Martin, a Wellington-based currency strategist at Bank of New Zealand.

But she added that the kiwi could find its footing when investors acknowledged that the RBNZ had still been relatively hawkish by giving a strong signal that rates would likely rise in March.

Bank bill futures 0#NBB: jumped and government bonds

0#NZTSY= rallied, pushing yields as much as 6.5 basis points lower across the curve.

Markets CSSY are now pricing in a 96 percent chance that the RBNZ will raise rates by 25 basis points in March, with nearly 122 basis points of tightening discounted over the next 12 months.

That would place the RBNZ well ahead of the major central banks, many of which continue to offer monetary stimulus to boost their economies, and keep the kiwi supported around $0.8100-$0.8400 in the midterm.

The Australian dollar was pinned at $0.8715 AUD=D4 , within sight of a 3-1/2-year trough of $0.8660 set last week. It has been put under pressure by rumbles in emerging markets, particularly in Turkey, South Africa and Argentina.

The Aussie is often used as a proxy to hedge against risks in less liquid emerging markets.

Support was seen at $0.8725, then $0.8660, with hourly resistance near $0.8785.

A jump in U.S. Treasuries sent Australian government bond futures higher with the three-year bond contract YTTc1 up 8 ticks at 97.150.

The 10-year contract gained 10.5 ticks to 96.060, leading to a bullish flattening of the yield curve.

(Editing by Chris Gallagher)

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

Keywords: MARKETS AUSTRALIA/FOREX