The Norwegian krone is gaining in value following Norges Bank's decision to keep interest rates unchanged at 4.5%. The bank communicated that interest rates will most likely remain in the 4.5% zone until the end of this year.
Inflation is still above the Norges Bank's target and the rapid increase in the cost of doing business will contribute to keeping inflation high in the future. The Norwegian central bank committee was concerned about the possibility that, if the interest rate is cut prematurely, inflation could remain above target for too long.
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Open real account TRY DEMO Download mobile app Download mobile appSince the March report, inflation has turned out to be slightly lower than expected, while unemployment has increased in line with expectations. Improved sentiment in the corporate sector may push wage growth higher than previously expected, so future Norges Bank decisions may be directed at maintaining a conservative stance.
Reaction to the Norges Bank decision. Source: xStation
From a slightly broader point of view, it seems that as long as the pair does not manage to break above the resistances set by the combination of the 50-, 100- and 200-day EMAs the downward pressure on the pair will continue. The most important region of support in case of further declines could be the level of 10.4300, where the minimum from the beginning of June runs. Source: xStation
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