Dollar down on greenback boost

THE dollar is lower as strong US data pushes the greenback higher and Chinese manufacturing hits an 11-month low.

Weak Chinese data pointed to a slow-down in the Asian powerhouse.

THE Australian dollar is lower as strong US data pushes the greenback higher and after figures showed manufacturing activity in China at an 11-month low.

At 12pm AEST today, the local unit was buying 91.45 US cents, down from 92.57 cents yesterday.

The Australian dollar fell sharply yesterday after data showed manufacturing activity in China in July slowed to the lowest level since August last year.

The Aussie then came under pressure as the greenback was given a boost overnight by figures showing sales of US new homes beat expectations in June and were at their highest level in five years.

Westpac chief currency strategist Robert Rennie said those factors, combined with hawkish comments from the New Zealand Reserve Bank this morning, were weighing on the Australian dollar.

"The Australian dollar underperformed the New Zealand dollar after the Reserve Bank raised the possibility of future interest rate rises," Mr Rennie said.

"The US dollar has been given a boost from those new home sales figures."

Meanwhile, Australian bond futures prices were lower.

At 12pm AEST, the September 10-year bond futures contract was trading at 96.240 (implying a yield of 3.760 per cent), down from 96.310 (3.690) yesterday.

The September three-year bond futures contract was at 97.310 (2.690 per cent), down from 97.340 (2.660 per cent).

###