Investing.com - The New Zealand dollar tumbled to a two-week low against its U.S. counterpart on Thursday, after the Reserve Bank of New Zealand left interest rates on hold, while the Australian dollar also moved lower amid ongoing global geopolitical tensions.
NZD/USD lost 1.36% to 0.7268, the lowest since July 18.
In a widely expected move, the RBNZ left interest rates unchanged at 1.75% but added that it still expects inflation to rise gradually.
RBNZ Governor Graeme Wheeler said monetary policy would remain accommodative for a while yet and that the Kiwi had risen since the last monetary policy statement in May partly in response to a weaker U.S. dollar.
Wheeler added that a lower New Zealand dollar would help increase inflation and achieve more balanced growth.
AUD/USD slipped 0.15% to trade at 0.7878.
Meanwhile, investors remained cautious as tensions between and Washington and Pyongyang remained high, with North Korea's state media saying on Thursday the country will develop a plan by mid-August to launch intermediate-range missiles at the U.S. territory of Guam.
The comments came after U.S. President Donald Trump said earlier in the week that North Korea would be "met with fire and fury" if it continued its threats.
Market participants were also eyeing U.S. inflation reports due later Thursday and on Friday for indications of whether the recovery in the dollar is sustainable in the longer term.
The greenback has been supported in recent sessions by upbeat U.S. employment reports, which fueled expectations the Federal Reserve will stick to its plans for a third interest rate hike this year.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.18% at 93.58, just off the previous session’s more than one-week high of 93.77.