NOK: Vulnerable to the liquidity shock – ING

FXStreet Insights Team FXStreet

After the Australian dollar, the Norwegian krone has been the worst-performing G10 currency over the last week, ING's FX analyst Chris Turner notes.

NOK/JPY can make a break towards the 12.00 area

"It has taken a big hit both from the fall in oil prices (an OPEC+ supply increase was a big shock) and the fact that Norwegian interest rates have some of the furthest fall to given the previously hawkish stance of Norges Bank. What may well impact the NOK as well is declining liquidity."

"This generalised rise in volatility, increasing investors' value-at-risk metrics and forcing deleveraging, will impact FX liquidity. The NOK traditionally performs very poorly in illiquid environments, which could be the story this week."

"Expect investors (those with the ability to establish new positions) to be looking at a pair like NOK/JPY. Were things to get really ugly this week in financial markets, NOK/JPY could make a break towards the 12.00 area."

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.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD edges higher to mid-1.1600s; looks to US PCE Price Index for fresh impetus

The EUR/USD pair attracts some dip-buyers during the Asian session on Friday and recovers a part of the previous day's retracement slide from the 1.1680 region, or the highest level since October 17. Spot prices currently trade around mid-1.1600s and remain on track to register gains for the second straight week.

GBP/USD: Constructive view prevails above 1.3300 ahead of US PCE inflation data

The GBP/USD pair trades on a flat note near 1.3330 during the Asian trading hours on Friday. Traders prefer to wait on the sidelines ahead of the key US inflation report later on Friday. The US delayed Personal Consumption Expenditures Price Index report for September could offer some hints about the US interest rate path.

Gold bull-bear tug-of-war extends ahead of US data

Gold struggles around $4,200 early Friday, eyes a modestly flat close to the week. US Dollar turns south alongside Treasury bond yields amid Fed rate cut buzz. Gold remains confined within a tight range; buyers refuse to give up yet.

Top Crypto Gainers: Zcash rallies as MYX Finance, Dash test critical EMA levels

Zcash, MYX Finance, and Dash are the top-performing assets in the top 100 cryptocurrency list over the last 24 hours. The privacy coin leads the rally while MYX and DASH struggle to clear their 100-day Exponential Moving Averages.

Why the Fed may cut rates in December: Understanding the policy shift

The Fed has gone through a noticeable policy swing in recent months - from initiating a rate cut, to signaling a potential pause, and now shifting once again toward another cut in December. This has created understandable confusion among traders and investors trying to interpret the Fed’s reaction function.

XRP edges lower despite record on-chain activity and steady ETF inflows

Ripple is trading under pressure at the time of writing on Thursday, after bulls failed to break the short-term resistance at $2.22. The reversal may extend toward Monday’s low of $1.98, especially if risk-off sentiment persists in the broader cryptocurrency market.