- EUR/NOK extends the upside to the vicinity of 11.2000 on Thursday.
- The Norges Bank left the key policy rate unchanged at 0.00%, as expected.
- The rate path sees current levels to remain at least for the next 2 years.
The Norwegian krone is prolonging the downside momentum for yet another session and is helping EUR/NOK to advance to new 3-month tops in the vicinity of 11.2000.
EUR/NOK higher post-Norges Bank
NOK navigates multi-month lows vs. its European peer on Thursday after the Norges Bank left unchanged the key policy rate at 0.00% at its meeting.
However, the Scandinavian central bank delivered an unexpected cautious message, suggesting that current levels of the key rate are forecasted to persist until at least end of 2022, as opposed to markets’ expectations of an earlier move (up) on rates.
The Norges Bank justified its renewed cautiousness by the rising uncertainty hovering around the global growth prospects. This view is also seen affecting the demand for crude oil and therefore its prices.
What to look for around NOK
NOK remains well on the defensive as of late amidst renewed concerns over the economic outlook across the world and the impact on a small economy like Norway’s. in addition, the absence of upside traction in prices of the Brent crude has been also weighing on the Nordic currency. On the more macro scenario, and following the latest meeting, the Norges Bank has now shifted to a more cautious (dovish?) tone, supporting the idea of a weaker krone in the months to come.
EUR/NOK significant levels
As of writing the cross is gaining 0.41% at 11.1063 and faces the next up barrier at 11.1769 (monthly high Sep.24) followed by 11.6965 (monthly high Apr.22) and then 13.1492 (2020 high Mar.19). On the downside, a breach of 10.6727 (200-day SMA) would expose 10.4618 (low Aug.14) and finally 10.3723 (monthly low Aug.31).
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