The dollar falls and the yuan rises after the Chinese PMI; inflation data boost euro

Samuel Indyk and Rae Wee

LONDON, March 1 (Reuters) – The dollar lost ground and the yuan rose on Wednesday after Chinese manufacturing activity grew at its fastest pace since April 2012, while the euro rose after data on regional prices in Germany increased concerns about inflation.

* The Australian and New Zealand dollars also benefited from strong Chinese economic data, which beat expectations. The official Purchasing Managers’ Index (PMI) for the manufacturing sector rose to 52.6 last month from 50.1 in January.

* Similarly, Chinese non-manufacturing activity grew at a faster pace in February, while last month’s Caixin/S&P global manufacturing PMI also beat market expectations.

* The “onshore” yuan rose in the local session to 6.8854 units to the dollar, the strongest close since Feb. 21, while the “offshore” yuan improved 1% to 6.8811, its biggest daily rise since late November.

* “The data confirms expectations that the growth outlook has improved significantly in China, so it is positive for risk sentiment,” said Niels Christensen, chief analyst at Nordea. “It put the dollar on the defensive.”

* The kiwi rose 0.9% to $0.6242, while its Australian counterpart gained 0.5% to $0.6762, reversing a two-month low on encouraging weak domestic economic data. Antipodean currencies are often used as liquid substitutes for the yuan.

* Meanwhile, data from Germany’s most populous state, North Rhine-Westphalia, showed consumer prices rose 8.5% a year last month, from 8.3 % in January. Further regional consumer price data will be released throughout the European morning, before pan-European data is released at 13:00 GMT.

* The euro rose 0.7% to $1.0650 and the pound rose 0.5% to $1.2081. The dollar index lost 0.6%, to 104.36 units, and the greenback fell 0.17% against its Japanese pair, to 136 yen.

(Edited in Spanish by Carlos Serrano)