The New Zealand dollar fell after weak Chinese factory data yesterday raised concerns about a slowdown in Asia's largest economy.

The kiwi dropped to 63.31 US cents at 8am in Wellington, from 63.74 cents at 5pm yesterday.

The trade-weighted index slipped to 68.70 from 68.91 yesterday.

Investors sold higher-risk currencies such as the kiwi in favour of the safe-haven yen and Swiss franc after a report showed China's manufacturing sector contracted at its fastest pace in three years in August, stoking concerns about global growth.

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Stocks on major markets tumbled along with commodity prices.

The International Monetary Fund cut its forecast for world growth this year, due to a slower recovery in advanced economies and a further slowdown in emerging nations.

"Weakness in Asian equities and soft Chinese data saw a waning of risk appetite," ANZ Bank New Zealand senior economist Mark Smith and economist Dylan Eades said in a note.

"Heightened financial market volatility due to weakness in the Asian region will continue to provide a negative backdrop for the New Zealand dollar."

Dairy product prices rose 10.9 percent in the GlobalDairyTrade auction overnight, taking the gain over the last two events to 23 per cent after nearly six months of declines.

Still, the US$2,078 whole milk powder price is still below the US$2,200 level needed to achieve Fonterra Cooperative Group's 2015/16 $3.85 per kilogram of milk solids forecast payout to farmers, and the auction provided only a "modicum" of support for the kiwi, ANZ said.

ANZ expects the kiwi to trade between 63 US cents and 63.90 cents today. In New Zealand today, ANZ publishes its Commodity Price Index at 1pm.

The New Zealand dollar advanced to 90.13 Australian cents from 89.41 cents yesterday after the Reserve Bank of Australia kept its benchmark interest rate unchanged yesterday. Today, Australian second-quarter GDP data is due out.

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The local currency fell to 56.04 euro cents from 56.56 cents yesterday as investors favoured the lower yielding euro over high yielding currencies like the kiwi in times of risk aversion.

It edged lower to 41.36 British pence from 41.40 pence yesterday.

The kiwi dropped to 75.79 yen from 76.97 yen, and declined to 60.78 Swiss franc from 61.29 franc. It slipped to 4.0284 yuan from 4.0585 yuan yesterday.