SYDNEY (BLOOMBERG) - The Australian dollar dropped to a six-year low and the New Zealand dollar also retreated after a gauge of Chinese manufacturing activity unexpectedly slipped to the weakest in more than a year.

The Aussie weakened at least 0.4 per cent against its 10 major developed peers after the Caixin Media and Markit Economics' flash manufacturing purchasing managers' index showed a greater-than-expected slump in July. China is a key export market for both South Pacific nations.

"Anything that suggests we aren't really seeing signs of a recovery in China adds a bit of weight on Aussie," said Robert Rennie, the global head of currency and commodity strategy at Westpac Banking Corp. in Sydney. Risks of a drop toward 70 US cents are building, he said.

Australia's currency tumbled 0.7 per cent to 73.06 US cents as of 11:13 a.m. in Tokyo, after falling to as low as 72.96, the lowest since May 2009. The New Zealand dollar fell 0.2 per cent to 65.94 US cents, paring its strongest weekly advance since April.

The preliminary Purchasing Managers' Index from Caixin Media and Markit Economics was at 48.2 for July, down from 49.4 the previous month. The median estimate in a Bloomberg survey was for an increase to 49.7. Numbers below 50 indicate contraction.