USD/NOK Outlook:
The USD/NOK is likely to decrease as it is currently trading near 7-day lows and significantly below its recent 3-month average. The low position, combined with increasing external pressures, suggests this trend may continue.
Key drivers:
- Rate gap: U.S. Federal Reserve rate hikes have supported the USD, but the Norges Bank's decision to maintain rates boosts the NOK.
- Risk/commodities: Rising oil prices have generally favored NOK, with oil trading significantly above its 3-month average, benefiting Norway's economy.
- One macro factor: Recent higher-than-expected inflation in Norway has led to strong CPI data, impacting the NOK positively.
Range:
Expect the USD/NOK to hold within its recent range, potentially testing lower extremes due to ongoing pressures.
What could change it:
- Upside risk: A surprising shift in U.S. economic data may strengthen the USD.
- Downside risk: Increased volatility in oil prices could negatively affect the NOK.
