By Wayne Cole

SYDNEY, June 24 (Reuters) - The Australian dollar was stuck near 11-week lows on Wednesday as local inflation data proved too mixed to move the dial on the chance of further rate hikes, while a global retreat in risk assets weighed on sentiment more broadly.

The Aussie was flat at $0.6912 AUD=D3, having shed 1.2% overnight as a break of support at $0.6979 triggered a wave of stop-loss sales. The next bear target is a low from March at $0.6834.

The kiwi dollar wallowed at a seven-month trough of $0.5660 NZD=D3, after losing 0.8% overnight. Major support now lies at a trough from November last year at $0.5681.

Australian data showed consumer prices fell by a surprisingly large 0.7% in May, squeezed by petrol, clothing and holidays. That compared to forecasts of a 0.4% dip and dragged the annual pace down to 4.0%.

Yet the key trimmed mean measure of core inflation rose by 0.4% in the month, topping forecasts of 0.3% and pushing the annual pace up to 3.6% from 3.4%.

The Reserve Bank of Australia has raised rates three times this year in an effort to ensure core inflation ultimately returns to its target band of 2% to 3%.

The central bank is currently on pause to see how the economy develops, but has warned it will hike again if needed.

"The continued strengthening of core price pressures in May means that the RBA can't declare victory in the war on inflation just yet," said Abhijit Surya, a senior APAC economist at Capital Economics.

"Accordingly, we continue to believe it will deliver one final 25bp hike before calling time on its tightening cycle."

Markets are divided and imply around a 50% chance of a further quarter-point rise in the 4.35% cash rate. A move is seen much more likely late in the year rather than at the next RBA meeting in August. 0#AUDIRPR

In contrast, futures 0#FF: are almost fully priced for a hike by the Federal Reserve in September, and for another move early next year. 0#USDIRPR

The hawkish outlook on U.S. rates has helped Australian bonds outperform Treasuries, but that has in turn narrowed the Aussie's yield premium.

Australian 10-year notes AU10YT=RR now pay 4.78%, just 29 basis points more than U.S. notes and down from a peak of 75 basis points in April.