Tuesday, June 6, 2023
HomeUncategorizedEUR/NOK bounces off session lows after Norges Bank rate hike

EUR/NOK bounces off session lows after Norges Bank rate hike

  • EUR/USD bounced off lows in the 9.8400 area on Thursday.
  • Norges Bank raised its policy rate by 50 basis points to 1.75%.
  • Mainland Norway’s GDP grew by 0.7% in the second quarter.

NOK gave up some of its earlier gains and prompted EURNOK rebounded from Thursday’s early lows near 9.8400.

EUR/NOK remains on the defensive after Norges Bank decision

EUR/NOK retreated on Wednesday after Norway’s tone improved after Norges Bank raised its policy rate by 50 basis points to 1.75% at Thursday’s meeting, in line with broad consensus of rising prices.

The Nordic Central Bank also made an optimistic assessment of the Scandinavian economy, emphasizing robust economic activity and low employment And with little spare capacity, everything was higher than initially expected with inflation continuing to run, well above the bank’s 2.0% target.

Norges Bank also opens the door for another rate hike

Additional buying interest around the krona came from a modest rise so far in Brent crude, the European benchmark, adding to Wednesday’s gains near $94.00 a barrel.

Further data from Norway showed that mainland GDP grew by 0.7% MoM in April-June period.

EUR/NOK significant level

As of this writing, the cross is down 0.26% at 9.8593, a breakout of 9.7726 (August 10 monthly low) would open a move to 9.7672 (May 10) 5th monthly low) and finally 9.4325 (2022 low 08/08). On the upside, the next resistance is at 10.0194 (monthly high on August 5), then at 10.1503 (55-day SMA), then at 10.3987 (monthly high on July 1).

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