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NZD/USD with gains on improved global recovery outlook

NZDUSD1New Zealand dollar showed a certain advance against its US peer on Tuesday, following the release of upbeat economic reports out of the Euro zone and China on Monday, which boosted outlook over global recovery.

NZD/USD rose to its highest point on Tuesday at 0.7839 during the early phase of Asian trade, after which the pair consolidated at 0.7818, up by 0.06% on a daily basis. Support was likely to be received at August 30th low, 0.7722, while resistance was to be met at August 6th high, 0.7918.

Investors risk appetite strengthened, after it became clear that Chinese manufacturing PMI increased to a reading of 51.0 in August, or the highest point in 16 months, from 50.3 in July, while Chinese non-manufacturing Purchasing Managers’ Index (PMI) fell to 53.9 during August from 54.1 in July. In addition, in Italy and Spain activity in the sector of manufacturing returned to expansion zone (above 50.0 reading) for the first time since 2011.

In the mean time, markets were expecting the ISM Manufacturing indicator out of the United States, scheduled for release later on trading Tuesday, as it may prove to be the key indicator for the US central bank to start scaling back its easing program. US dollar was boosted, namely because of expectations that the Federal Reserve Bank will begin tapering its asset purchases at its policy meeting on September 17-18th.

Also, on Tuesday the Australia and New Zealand Banking Group Ltd. (ANZ) said that their index of commodity prices in New Zealand improved 0.7% in August on a monthly basis, after registering a 0.6% gain in the preceding month. This index gauges the change in the average price of all categories of goods, exported from the country. The national currency gained ground against 13 of its 16 most traded peers, following this data.

Elsewhere, the kiwi dollar was lower against the Australian currency, with AUD/NZD cross advancing 0.59% on a daily basis to trade at 1.1568 at 8:49 GMT.

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