- EUR/NOK bounces of the post-Norges Bank lows near 10.12.
- The Norges Bank raised the key policy rate by 50 bps to 2.25%.
- Further rate hikes will depend on how inflation evolves.
The Norwegian Krone gives aways part of the initial gains and now helps EUR/NOK resuming the upside to the area above 10.2000 on Thursday.
EUR/NOK up despite oil gains, dovish NB weighs on NOK
EUR/NOK manages to leave behind Wednesday’s daily decline and regains upside traction, as investors continue to adjust to the somewhat dovish tilt in the Norges Bank.
Indeed, the Scandinavian central bank raised the policy rate by half point to 2.25% at its meeting earlier on Thursday, although it linked the prospects for extra rate hikes to the progress of inflation.
In fact, the Norges Bank reiterated that inflation remains well above the bank’s target, although some signs of cooling in the economy could morph into some deceleration of inflationary pressures. The bank sees rates at around 3% over the winter.
EUR/NOK significant levels
As of writing the cross is gaining 0.48% at 10.2228 and the next resistance emerges at 10.3198 (monthly high September 20) followed by 10.5393 (2022 high June 16) and then 10.6323 (monthly high August 20 2021). On the downside, a drop below 10.1260 (weekly low September 22) would open the door to 9.9884 (200-day SMA) and finally 9.8313 (monthly low September 6).
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