NZD Struggles Continue Amid Consolidation and Hawkish RBNZ

The New Zealand Dollar (NZD) continues to struggle despite higher inflation data. The NZD/USD exchange rate traded around 0.5771 on Tuesday, remaining relatively unchanged from Monday's drop of 0.36%. The pair has now surrendered more than a cent from its July peak but remains approximately 1.7% higher for the month.

BNZ believes that the currency is in a period of consolidation after its rapid recovery 'came to a grinding halt' last week. Higher oil prices and renewed demand for the safe-haven US Dollar have prevented strong New Zealand inflation data from generating a lasting impact on the market.

The NZD's struggles come as the US dollar holds at a one-month high, with traders weighing a slim but lingering chance of a rate hike at the Federal Reserve's upcoming meeting. The dollar index edged up 0.03% to 101.55 on Tuesday.