EUR/NOK in 2018 lows near 9.50 on steady Norges Bank
- The Norwegian Krone appreciated to the 9.50 area post-NB.
- Norges Bank left key rate unchanged at 0.5% at today’s meeting.
- Norges Bank sees a rate hike after summer 2018.
The Norwegian Krone is extending its buying pressure this week and is now dragging EUR/NOK to fresh 2018 lows in the 9.5200 neighbourhood.
EUR/NOK weaker on hawkish Norges Bank
NOK accelerated the upside momentum after the Norges Bank left unchanged its key rate at 0.50% at today’s meeting, broadly in line with market expectations.
The buying interest in NOK is sustained by the hawkish assessment of the Scandinavian central bank, which now expects to hike rates at some point after the summer 2018.
The Norges Bank removed relevance when comes to the interest rate outlook from the recent change in the inflation target, which, recall, it has been lowered to 2% from 2.5% in past weeks.
The Nordic central bank stressed that the output gap in the Norwegian economy is closing while the economic outlook appears stronger than expected. Despite inflation remains somewhat low, it is seen picking up pace following prospects of rising capacity utilization.
The central bank suggested ‘it will soon be appropriate to raise the key policy rate’, although under a cautious approach. The NB sees higher rates could come after summer 2018.
In the meantime, the cross is navigating the area of new YTD lows near the psychological 9.5000 milestone, levels last traded in mid-November 2017, and down for the fifth week in a row.
EUR/NOK significant levels
As of writing the cross is losing 0.50% at 9.5131 and a breakdown of 9.4985 (2018 low Mar.15) would open the door to 9.4289 (low Nov.7 2017) and then 9.2963 (low Oct.16 2017). On the upside, the next hurdle emerges at 9.6017 (high Mar.13) seconded by 9.6252 (21-day sma) and finally 9.7317 (high Mar.8).
