- EUR/NOK moves higher near 10.05.
- Norges Bank left the key rate unchanged at 1.25%.
- Norway Consumer Confidence improved to 17.1 in Q3.
The Norwegian Krone is adding to yesterday’s losses and pushes EUR/NOK to the vicinity of the 10.05 region, or weekly highs, just to lose some momentum afterwards.
EUR/NOK higher on NB, data
NOK keeps depreciating vs. its European peer in the second half of the week following a poor performance from crude oil prices. In fact, the barrel of Brent crude is down for the second session in a row and is flirting with the key 200-week SMA in the $58.00 area.
NOK remained apathetic after the Norges Bank left unchanged its policy rate at 1.25%, matching initial estimates. However, the message from the Scandinavian central bank appears to have fallen in the neutral side. Despite the bank sees a solid domestic economy, it has also highlighted uncertainties coming in from global developments.
All in all, the Norges Bank’s rate path now looks more flexible and upcoming domestic data should be key in determining the probability of a rate hike at the September meeting, as it was previously priced in.
In today’s docket, Norway Consumer Confidence improved to 17.1 for Q3, surpassing forecasts as well. In addition, July’s trade surplus shrunk significantly to NOK 6.5 billion (from NOK 21.9 billion), albeit came in above expectations.
What to look for around NOK
The Norwegian Krone has regained some ground following last week’s multi-year lows near 10.10 vs. the shared currency. Heightened concerns on the US-China trade front have sparked a global exodus to safe havens, hurting both NOK and crude oil prices. Today, the Norges Bank left unchanged the key rate, although it showed some unexpected flexibility regarding the future rate path (a September hike seems to have lost some traction now). In the meantime, while the Nordic economy keeps its shine intact, developments overseas could cast dark clouds on the domestic economic outlook and hurt the central bank’s perspective.
EUR/NOK significant levels
As of writing the cross is gaining 0.03% at 10.0042 and faces the next hurdle at 10.0972 (2019 high Aug.7) seconded by 10.1174 (2008 high) and then 1.1100 (psychological level). On the other hand, a break below 9.9014 (low Aug.14) would expose 9.8251 (21-day SMA) and finally 9.7311 (200-day SMA).
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