The New Zealand dollar rose against the pound as the British Conservative Party conference gets underway with deep divisions over Brexit and after weaker-than-expected manufacturing data.

The kiwi gained to 54.22 British pence as at 8am in Wellington from 53.81 pence late yesterday. It increased to 72.02 US cents from 71.96 cents yesterday.

The UK's Markit PMI for manufacturing printed at 55.9 in September, missing estimates for 56.2 contributing to a slide in the pound. At the Conservative Party conference Prime Minister Theresa May is reportedly fighting for her survival amid reports Foreign Minister Boris Johnson is ambitious for the top job, having criticised May's Brexit strategy.

In the US, the ISM manufacturing survey was stronger than expected.

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"For currencies, it appears that political developments have dominated. The worst performing currency is GBP," said Jason Wong, currency strategist at Bank of New Zealand, in a note. "GBP was well down even before the softer PMI data were released."

The New Zealand dollar rose to 61.33 euro cents from 61.09 cents yesterday after an independence vote in Spain's Catalonia over the weekend, which the national government has declared illegal.

Traders will be watching for the quarterly survey of business opinion in New Zealand today, while across the Tasman, Australia has building approvals for August and the Reserve Bank reviews the cash rate, although no change is expected.

Tonight, the latest GlobalDairyTrade auction will show what's happening to demand and prices for dairy products.

See live rates for the NZ-US $ below. Click for more information:NzForex Foreign Exchange Transfers

With the kiwi hovering around 72 US cents, Wong said it "looks a little cheap" against his short-term fair value model "against the backdrop of risk appetite reaching its highest level this year" and rising New Zealand commodity prices. "But it is finding it difficult to make headway against the broadly-based USD recovery."

The kiwi traded at 81.12 yen from 81.19 yen yesterday when data showed Japan's big manufacturers were the most confident about the business outlook in a decade in the last quarter. The local currency was at 91.91 Australian cents from 91.96 cents and traded at 4.7917 yuan from 4.7877 yuan.

The trade-weighted index was at 76.09 from 76.