Hot Norwegian Inflation
The Norwegian Krone is rallying against the Dollar today after the release of stronger than expected inflation figures this morning. Headline Norwegian CPI remained at 3% last month, holding at its highest level since February. Additionally, underlying CPI was seen rising to 3.1% from 2.8% prior, above the 3% market forecast level. The Norwegian central bank surprises traders with a rate cut in June premised on the basis that underlying inflation had fallen back under the 3% level. Now back above that level, today’s data has been seen as effectively ruling out a follow up rate cut from the bank next month.
Weak USD
The rally in NOK is being further enhanced by a weaker US Dollar today. USD remains soft on the back of yesterday’s dovish FOMC minutes release which has seen expectations for a September rate cut rising. Looking ahead, traders will be watching incoming US data today with the release of weekly jobless claims. Any uptick in that reading should further weigh on USDNOK ahead of the weekend. Alongside US data traders will be keeping an eye on oil prices with the current rise also helping drive NOK higher. If oil prices continue higher near-term, fuelled by growing tariff optimism, this should keep USDNOK anchored lower.
Technical Views
USDNOK
The sell off has stalled for now into the 9.9320 level. However, the bounced has proved shallow and price is now turning lower again. Given the bear channel framing the move lower this year, focus remains on downside for now with 9.7116 the next bear objective if we break lows. Topside, bulls need to clear 10.3060 and the channel highs to clear these bearish risks.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.