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Dollar holds steady as traders await US manufacturing data

The New Zealand dollar was little changed along with other major currencies as weak manufacturing PMI data from China to Europe had traders looking ahead to manufacturing figures from the US tonight.

The kiwi was at 83.76 US cents at 8am in Wellington, from 83.73 cents at 5pm yesterday following the Labor Day holiday in the US yesterday. The trade-weighted index was at 79.14 from 79.10 yesterday.

Manufacturing data from China yesterday showed Asia's largest economy suffered a pullback in activity in August. Meanwhile, in Europe, UK factory activity slowed more than forecast, Italian manufacturing shrank and the measure for Germany, the region's largest economy, declined. Traders will be looking to tonight's release of a US manufacturing index to gauge how the world's largest economy is faring.

"The currency is unchanged because there was a raft of PMI data overnight and it was all uniformly ghastly and therefore everybody is in the same boat so there is nothing new," said Peter Cavanaugh, client advisor at Bancorp Treasury Services. "They are waiting for the US PMI to see how it stands up against the rest, whether it is in contrast or just as weak."

Locally, traders will be eyeing the latest ANZ Commodity Price Index, released at 1pm. The latest Fonterra Cooperative Group GlobalDairyTrade auction is scheduled early tomorrow morning.

The New Zealand dollar advanced to 89.74 Australian cents from 89.62 cents yesterday ahead of the Reserve Bank of Australia's decision on interest rates today and current account data.

The kiwi was little changed at 50.42 British pence from 50.44 pence yesterday, advanced to 87.34 yen from 87.23 yen and was unchanged at 63.78 euro cents.

(BusinessDesk)

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