The USD/NOK pair has risen in the past three straight days as investors reflect on the recent US inflation data. The pair is trading at 8.6875, which is the highest it has been since October 1.
Norges Bank tightening
The USD/NOK pair has risen in the past three days as investors focus on the Federal Reserve and Norges Bank.
Are you looking for fast-news, hot-tips and market analysis?
Sign-up for the Invezz newsletter, today.
The Norwegian central bank was the first major bank to start tightening. It did that by implementing the first pandemic-era interest rate hike in Europe. This happened because the country’s economy recovered at a relatively faster pace than its peers.
The Norwegian economy was helped by three main factors. First, the country was relatively successful in managing the coronavirus pandemic. It had better infection rates than other comparable countries.
Second, the government had ample resources to help in the recovery. This is important since Norway has the biggest sovereign wealth fund in the world. Therefore, it was able to tap these funds to stimulate the economy.
Third, the country’s economy was supported by the relatively higher crude oil prices. In the past few months, the price of crude oil has surged to a multi-year high as demand has remained steady. This is notable since the country exports more oil than it consumes.
On Friday, Norway’s statistics agency will publish the latest GDP data. Analysts expect that the mainland GDP rose by 1.5% in the third quarter. Norway’s GDP data will have little implications on the USD/NOK pair.
Meanwhile, the Federal Reserve has also turned hawkish. Last week, the Fed started unwinding its giant $120 billion a month quantitative easing (QE). With inflation rising, analysts expect that the bank will accelerate the pace of tightening.
Data published this week showed that the US consumer price index (CPI) rose to 6.2% in October, This was a dramatic increase from the previous 5.6%. Core inflation rose by about 4.6%.
The US has also clocked low unemployment rate in the past few weeks. Therefore, there is a likelihood that the Fed will accelerate its tightening in the coming months. For now, the USD/NOK pair will likely keep rising as the risk-off sentiment returns in the market.
67% of retail CFD accounts lose money
- China forcing migration of Uyghur Muslims from Xinjiang, says report – Times of India
- “They are just too strong” – Michael Owen predicts the result for Chelsea vs Manchester United
- #VicKat wedding: Everything about Katrina Kaif’s ₹1 lakh Rajasthani Mehendi
- Nagaland takes travel inspiration from USA’s Sturgis, aims for off-road tourism
- Should you buy Apple stock as it nears a breakout? | Invezz
- Ed Orgeron will not coach LSU in bowl game: ‘I’m packing to go to Destin’