July 15 (Bloomberg) -- The Australian and New Zealand dollars fell from two-months highs before reports that economists said will show China's gross domestic product growth slowed last quarter and consumer prices rose in June. Australia's currency dropped the most in two weeks against the dollar and the yen on speculation China, the biggest buyer of iron ore, will cut annual imports for the first time since 1998 amid government measures to curb asset prices. Australia is the world's biggest shipper of the raw material and China is its largest trading partner. The Asian economy is New Zealand's second-biggest export market. "China's GDP report for the second quarter will provide another piece of the puzzle in the debate about a hard versus a soft landing, with implications for the Australian dollar," said John Kyriakopoulos, head of foreign-exchange strategy in Sydney at National Australia Bank Ltd. There is "caution by traders ahead of today's Chinese economic reports." Australia's dollar fell to 87.88 U.S. cents as of 10:49 a.m. in Sydney from 88.51 cents in New York yesterday, when it climbed to 88.71, the highest since May 14. The currency dropped 0.9 percent to 77.51 yen. New Zealand's dollar declined 0.6 percent to 72 U.S. cents after rising yesterday to 72.55 cents, the strongest since May 10. The currency slid 0.8 percent to 63.52 yen. China's economy grew 10.5 percent last quarter from a year earlier, after expanding 11.9 percent in the previous three months, according to a Bloomberg News survey. Consumer prices rose an annual 3.3 percent in June, the most in 20 months, a separate Bloomberg survey shows. China Growth Chinese central bank adviser Xia Bin said the nation's economic growth may slow by two to three percentage points in the second half from the first quarter, the China Securities Journal reported today. China should stick to its 7.5 trillion yuan ($1.1 trillion) goal for new lending this year, the newspaper cited Xia as saying. Given current market conditions and first-half demand, it's almost certain China will import less iron ore this year than last year's record 628 million tons, Xu Xiangchun, chief analyst at Mysteel Research Institute, a metals research firm, said in a telephone interview from Beijing. Both South Pacific nation's currencies dropped against the yen by the most in two weeks as minutes of the Federal Reserve's June 23 meeting showed central bankers were concerned about U.S. unemployment and risks that inflation may decelerate. The MSCI Asia Pacific Index fell 0.7 percent amid concerns over the slowing in the U.S. and Chinese economies. Benchmark interest rates are 4.5 percent in Australia and 2.75 percent in New Zealand, compared with 0.1 percent in Japan and as low as zero percent in the U.S., attracting investors to the South Pacific nations' higher-yielding assets. The risk in such trades is that currency market moves will erase profits. N.Z. Manufacturing Declines in New Zealand's currency were limited with a private report showing its manufacturing industry expanded at a faster pace in June, adding to evidence exports are buoying growth as consumer spending and housing slacken. The manufacturing index rose to 56.2 from a revised 54.4 in May, Bank of New Zealand Ltd. and Business New Zealand, a Wellington-based employer group, said on the group's website. A reading above 50 indicates an expansion. Central bank Governor Alan Bollard on June 10 raised the official cash rate and will increase it again on July 29, according to economists surveyed by Bloomberg News. Australian bond futures rose, with the 10-year contract for September delivery at 94.90 on the Sydney Futures Exchange from 94.82 yesterday. The implied yield on the futures stood at 5.10 percent. New Zealand's two-year swap rate, a fixed payment made to receive floating rates, was unchanged at 4.25 percent. --With assistance from Helen Yuan in Shanghai. Editors: Nicholas Reynolds, Rocky Swift

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