USD/NOK Outlook:
USD/NOK is likely to decrease as it currently trades significantly below its recent average and near recent lows. The strength of the Norwegian Krone is driving this movement.
Key drivers:
• Rate gap: The US Federal Reserve has been cautious with interest rate movements, while Norges Bank maintains a stable policy.
• Risk/commodities: Oil prices are currently well above average, positively impacting the NOK due to Norway's heavy reliance on oil exports.
• Macro factor: Recent US GDP figures showed a sharper decline than expected, adding downward pressure on the USD.
Range:
The USD/NOK is expected to drift within its recent range, reflecting the current positioning near the lower end.
What could change it:
• Upside risk: A hawkish comment from a Federal Reserve official could strengthen the USD.
• Downside risk: Continued increases in oil prices could further bolster the NOK.
