USD / NOK rebound to accelerate ahead of Norway GDP data

0


The USD / NOK pair has risen for the past three consecutive days as investors reflect on recent inflation data in the United States. The pair is trading at 8.6875 which is the highest since October 1.

Norges Bank tightening

USD / NOK has risen over the past three days as investors focus on the Federal Reserve and Norges Bank.

Are you looking for fast news, great deals and market analysis?

Sign up for the Invezz newsletter today.

The Norwegian central bank was the first major bank to start tightening. He did so by implementing the first pandemic-era interest rate hike in Europe. This happened because the country’s economy has recovered at a relatively faster rate than its peers.

The Norwegian economy has been helped by three main factors. First, the country has been relatively successful in dealing with the coronavirus pandemic. It had better infection rates than other comparable countries.

Second, the government had sufficient resources to help the recovery. This is important since Norway has the largest sovereign wealth fund in the world. Therefore, he was able to harness these funds to stimulate the economy.

Third, the country’s economy has been supported by relatively higher crude oil prices. In recent months, the price of crude oil has hit a multi-year high as demand has remained stable. This is notable since the country exports more oil than it consumes.

Therefore, analysts expect Norges Bank to raise interest rates again when it meets in December. It will also implement three more hikes in 2022, according to analysts at ING.

The Norwegian statistics agency will release the latest GDP data on Friday. Analysts predict that the mainland’s GDP grew 1.5% in the third quarter. Norway’s GDP data will have little implication on the USD / NOK pair.

Federal Reserve

Meanwhile, the Federal Reserve has also turned hawkish. Last week, the Fed began unwinding its giant quantitative easing (QE) of $ 120 billion per month. With inflation rising, analysts expect the bank to step up the pace of tightening.

Data released this week showed the U.S. Consumer Price Index (CPI) hit 6.2% in October, a dramatic increase from the previous 5.6%. Core inflation rose about 4.6%.

The United States has also experienced a low unemployment rate in recent weeks. It is therefore likely that the Fed will step up its tightening in the coming months. For now, the USD / NOK pair will likely continue to rise as the sentiment of risk aversion returns to the market.

Invest in Crypto, Stocks, ETFs and more in minutes with our favorite broker,

eToro






10/10

67% of retail CFDs lose money


Share.

About Author

Comments are closed.