- EUR/NOK pushes higher following poor CPI figures.
- NOK depreciates to monthly lows around 9.8300 vs. EUR.
- Norway CPI rose 2.5% during May, below consensus.
The selling pressure keeps picking up pace around the Norwegian Krone and is now lifting EUR/NOK to fresh monthly peaks beyond 9.8300.
EUR/NOK higher on CPI data
NOK depreciated further after inflation figures in the Scandinavian economy came in short of expectations for the month of May.
In fact, consumer prices tracked by the CPI rose 2.5% from a year earlier and unexpectedly contracted 0.3% on a monthly basis. In addition Core Inflation dropped 0.2% MoM and Core CPI YTD rose 2.3%, losing momentum from the previous 2.6% gain. The CPI-ATE (prices adjusted for tax changes and stripping energy costs) rose 2.3% over the last twelve months, a tad below the Norges Bank’s 2.5% target.
Further data saw Producer Prices advancing at an annualized 0.4% during the same period (from April’s 2.6% raise).
Later in the session, the Norges Bank will publish its always-critical Regional Network Survey.
What to look for around NOK
The mood around the risk complex, Brent-dynamics and a healthy economy continue to be the main drivers for the Norwegian currency for the time being. Today’s results from the Regional Network Survey by the Norges Bank will shed further detail on the prospects of the Nordic economy and will likely leave further tightening well on the table in the next months despite May’s lower-than-exepcted inflation figuures. In the broader picture, growth above trend, increasing capacity utilization, lower unemployment and upward pressure in wages and prices are expected to keep the central bank on a more aggressive mood for the time being and reinforces at the same time the view of a stronger Krone in the months to come.
EUR/NOK significant levels
As of writing the cross is advancing 0.38% at 9.8183 and faces the next up barrier at 9.8318 (monthly high Jun.11) followed by 9.8761 (monthly high May 10) and then 9.8803 (monthly high Mar.8). On the other hand, a breach of 9.7534 (low Jun.10) would expose 9.7102 (low May 28) and finally 9.6833 (200-day SMA).
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