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  • NOK appreciated to the 9.77 region vs. EUR on NB.
  • The Norges Bank kept the repo rate unchanged at 1.0% today.
  • NB expects to hike the key rate at the June meeting.

EUR/NOK dropped and tested fresh daily lows near the 9.7700 in the wake of the Norges Bank monetary policy meeting.

EUR/NOK now looks to CPI results

NOK is now trading on the positive footing after the Norges Bank kept the monetary status quo unchanged at today’s meeting, as largely anticipated.

In fact, the Scandinavian central bank kept the refi rate at 1.0% at today’s meeting and it has once again reiterated that the repo rate will likely be raised next month. The move on rates comes in response to higher inflation than the bank’s projection and rising capacity utilization, as per the latest report published in March.

Ahead in the week, key inflation figures tracked by the CPI for the month of April are due tomorrow seconded by Producer Prices.

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. This view is reinforced by the hawkish stance from the Norges Bank, which is now seen raising the key rate at the next meeting in June. 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 retreating 0.16% at 9.7952 and a break below 9.7733 (low May 9) would aim for 9.7282 (100-day SMA) and finally 9.6657 (200-day SMA). On the upside, the next hurdle emerges at 9.8396 (high May 9) followed by 9.8803 (high Mar.8) and then 9.9059 (23.6% Fibo of the October-December up move).