- EUR/NOK extends the downside to the 10.0600 area.
- The Norges Bank raised the policy rate to 0.25%, as expected.
- The bank’s rate path notes another hike in December.
The Norwegian krone appreciates further vs. its European peer and drags EUR/NOK to new 3-month lows near 10.0600.
EUR/NOK weaker post-Norges Bank
EUR/NOK loses ground for the third consecutive session on Thursday, this time the catalyst for extra NOK buying was the Norges Bank.
Indeed, the Scandinavian central bank is the first G10 central bank to start tightening its monetary conditions after the pandemic. The updated rate path now sees another hike at the December meeting followed by three more hikes during 2022. Hence, the policy rate is seen at 1.75% by end-2024, closer the bank’s view of the neutral interest rate.
The move higher in NOK also derives support from higher NIBOR, which navigates in the area last seen back in January around 0.51%.
EUR/NOK significant levels
As of writing the cross is losing 0.34% at 10.0780 and faces the next resistance at 10.2422 (200-day SMA) followed by 10.2812 (weekly high Sep.20) and then 10.3223 (monthly high Sep.8). On the other hand, a breach of 10.0642 (monthly low Sep.23) would open the door to 10.0403 (monthly low Jun.8) and finally 9.9004 (2021 low Apr.29).