EUR/NOK sinks near 9.3000 on steady Norges Bank

The Norwegian Krone is sharply higher vs. its European peer on Thursday, dragging EUR/NOK to fresh lows in the vicinity of the 9.3000 handle.

EUR/NOK lower on NB

NOK gathered extra upside pressure after the Norges Bank left its monetary status quo unchanged at today’s meeting, matching the broad consensus.

The Nordic central bank justified its decision in the fact that the Norwegian capacity utilization is ‘below a normal level’, albeit remains on the rise. The perspective for domestic inflation suggests consumer prices should remain below 2.5% in the next years, with inflation expectations firmly anchored. The expected recovery in capacity utilization suggests that inflation should pick up in the longer run.

Furthermore, the Norges Bank stressed “The changes in the outlook and the balance of risks imply a somewhat earlier increase in the key policy rate than projected in the June Report. Uncertainty surrounding the effects of monetary policy suggests a cautious approach to interest rate setting, also when it becomes appropriate to increase the key policy rate”.

In the meantime, the cross is retreating for the fifth consecutive session to challenge 2-week lows around 9.3200 the figure, coming down from monthly peaks in the 9.4330 region seen last week.

EUR/NOK significant levels

As of writing the cross is retreating 0.38% at 9.3188 and a breakdown of 9.3056 (low Sep.21) would aim for 9.2272 (200-day sma) and then 9.2200 (low Aug.25). On the flip side, the next up barrier lines up at 9.3942 (100-day sma) seconded by 9.4250 (high Aug.11) and finally 9.4334 (high Sep.14).