The Norges Bank made the expected decision to keep its interest rate steady at 4.5%, postponing any rate cuts until the first quarter of 2025. This delay is seen as a hawkish move compared to the more aggressive actions taken by other central banks in the region. The bank’s decision reflects concerns about potential inflation risks if rates are reduced too quickly, despite ongoing economic challenges.
As a result of this announcement, market expectations for a rate cut in the next six months have diminished, leading to a strengthening of the Krone against other currencies. The USD/NOK pair has been trading bearishly, with indicators such as the RSI and MACD signaling further downside. The pair has also dropped below key moving averages on the daily chart, indicating a potential continuation of the current bearish trend.
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