EUR/NOK sinks to lows on Norges Bank

The Norwegian Krone is sharply appreciating vs. its European peer today, sending EUR/NOK to fresh lows near 9.16.

EUR/NOK lower on steady NB

The cross has quickly dropped to multi-day lows in the 9.1600 neighbourhood after the Norges Bank left its monetary conditions unchanged at today’s meetin, with the key rate at 0.50%, in line with market expectations.

The Nordic central bank argued that domestic consumer prices have been unexpectedly high in past months, while the economic activity is gathering traction faster than expected at the June assessment. It sees, however, that low cost growth and a stronger currency could drive inflation lower in the next periods.

The Norges Bank expects rates to remain close to current levels in the next few years, while the key policy rate forecast “implies a slightly higher probability of a decrease than an increase in the key policy rate in the year ahead”.

EUR/NOK significant levels

As of writing the cross is retreating 0.80% at 9.1631 facing the next support at 9.1592 (low Sep.8) followed by 9.1461 (low Apr.20) and finally 9.1361 (2016 low Aug.12). On the other hand, a break above 9.3546 (high Sep.1) would open the door to 9.3952 (200-day sma) and then 9.5193 (high Jul.29).