NOK: Oil and conflict overshadow Norges Bank path – Commerzbank

FXStreet Insights Team FXStreet

Antje Praefcke at Commerzbank notes that Norwegian inflation fell in February but remains too strong for an imminent policy shift. She expects Norges Bank to stick to its guidance of 1–2 cuts this year while stressing risks from a stronger krone and higher energy prices, with NOK driven mainly by Oil and Middle East developments near term.

Oil-driven dynamics outweigh inflation surprise

"In December, Norges Bank signaled 1-2 interest rate cuts this year, expecting inflation rates to fall toward the 2% target over the course of the year."

"All in all, however, it is likely to stick to its current course for the time being and continue to signal its willingness to cut interest rates, provided that developments in the Iran conflict and energy prices do not thwart its plans (as is the case with many other central banks)."

"Monetary policy is therefore unlikely to be a factor."

"For weeks, the NOK has been benefiting from the tensions and ultimately from the outbreak of the Iran conflict."

"If the situation eases, corrections could quickly follow. As a result, further developments in the Middle East conflict and oil prices will remain the main drivers of the NOK in the short term."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD edges lower due to safe-haven demand

GBP/USD inches lower after opening at a bullish gap, trading around 1.3200 during the Asian hours on Monday. The pair loses ground as the Pound Sterling declines against the US Dollar amid emerging safe-haven demand, which could be attributed to the United States-Iran talks uncertainty.

EUR/USD steadies below 1.1400; Lagarde speech in spotlight

The EUR/USD pair holds steady near 1.1385 during the early European trading hours. Traders continue to assess the developments surrounding talks to end the US war with Iran. The European Central Bank's annual forum and the US June employment data will be the highlights later this week.

Gold holds losses near $4,050 as US-Iran clash triggers inflation fears

Gold price pares daily losses, remaining in the negative territory and trading around $4,070 during the Asian hours. The price of the yellow metal struggles as military clashes between the United States and Iran in the strategic Strait of Hormuz have pushed oil prices higher and reignited fears of inflation.

BTC rebounds; ETH and XRP defend key support following recent correction

Bitcoin, Ethereum and Ripple are showing early signs of stabilization after a correction of nearly 6%, 8% and 7% respectively, over the previous week. BTC reclaims $60,000, ETH is holding firmly above the critical $1,500 support level, while XRP is also attempting to stabilize around the key $1.00 psychological level.

Middle East War updates: US, Iran appear to be returning to talks to end the war

Here’s a brief recap of the key developments in the Middle East war that occurred over the weekend, which are expected to have a significant impact on markets in the upcoming week.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.