SYDNEY, July 26 (Reuters) - The Australian dollar slipped on Wednesday after a surprisingly low reading on inflation led investors to sharply lengthen the odds on a hike in interest rates next week, sparking a rally in bonds.

The Aussie was down 0.7% at $0.6742, reversing gains made overnight on hopes for more Chinese stimulus. Support lies at $0.6715 with resistance around $0.6845. Moving in sympathy, the kiwi dollar lost 0.4% to $0.6197.

Australian data showed consumer prices rose 0.8% in the June quarter, under forecasts of 1.0% and the smallest gain since the third quarter of 2021. The annual pace in core inflation slowed to 6.0%, from 6.6%, again under forecasts.

Goods price inflation slowed sharply in the quarter as blockages in global supply chains eased, but service inflation disappointed with the biggest rise since 2001.

The slowdown in the headline measures was enough to see markets scale back risks the Reserve Bank of Australia (RBA) would resume raising interest rates at its policy meeting on Aug. 1, having paused at 4.1% in July.

"There were encouraging signs of a moderation in the pace of inflation across most components in the CPI," said Sean Langcake, head of macroeconomic forecasting for Oxford Economics Australia.

"The CPI print is also below the RBA's most recent forecasts," he added. "While there are still concerns around the labour cost outlook, we think this will buy the RBA some more time and allow them to keep rates on hold a little longer."

Futures now imply around a 28% chance of a quarter point hike to 4.35%, compared to around 52% before the data. The expected peak for rates fell to 4.30%, from 4.45%.

Three-year bond futures rose 6 ticks to 96.100, while 10-year bond yields dipped to 4.03%.

The outlook will also be impacted by what the U.S. Federal Reserve chooses to do and say later on Wednesday. A quarter point rate rise is fully priced in, but any sign that might be the last in the cycle would lessen pressure on other central banks to keep tightening. (Reporting by Wayne Cole; Editing by Sonali Paul)