NZ dollar holds near two-week low around $0.585

The New Zealand dollar hovered around $0.585, its lowest level in two weeks, as the greenback firmed despite a subdued US consumer inflation report.

The data reduced the likelihood of monetary policy tightening by the Federal Reserve at its September meeting, with traders having already trimmed their rate-hike bets following Friday’s weak jobs report.

Investors also remained cautious as talks between the US and Iran appeared to have reached an impasse, with both sides hardening their positions, while President Donald Trump said the US has “total control” over the Strait of Hormuz.

Domestically, however, the NZ dollar continues to draw support from expectations that the Reserve Bank of New Zealand will deliver another quarter-point interest rate increase next month.