Bias: range-bound, USD/NOK sits near the 90-day average and in the lower half of the three-month range.
Key drivers:
- Rate gap: The US Fed is expected to cut rates later this year while Norges Bank has kept policy unchanged, widening the yield gap in favor of the krone.
- Oil sits near multiweek highs with volatility; that supports NOK through Norway's oil exports.
- Macro: Payrolls and unemployment data will shape Fed easing expectations; a stronger reading could lift the USD and weigh on NOK.
Range: The pair is likely to drift within the three-month range, with the path likely to stay nearer the lower end than the upper.
What could change it:
- Upside risk: Strong US payrolls or hawish Fed signals could strengthen the USD and push USD/NOK higher.
- Downside risk: A sharp fall in oil prices or clearer signs of earlier Norges Bank rate cuts could push USD/NOK lower.
