- Summary:
- The USDNOK is on its way down as a combination of a weaker USD and an earlier-than-planned rate hike cycle by the Norges Bank pressurizes the pair.
The Norwegian Krone continued to gain momentum against the US Dollar for the 3rd trading day in a row, as the Norges bank held interest rates at the record low of 0% this Thursday.
However, the Norges Bank has brought forward its plans to hike interest rates as it notes that the economic recovery was occurring at the anticipated rate. This decision to raise interest rates could make the Norges Bank the first country in the developed world to do so, as the country has handled its coronavirus epidemic better than most.
A recent Reuters poll says that Norway’s economy could grow 3.5% in 2021. The country began its coronavirus vaccination campaign four weeks ago and it expects economic growth to pick up with a robust vaccination rollout.
The Krone has strengthened by 0.94% against the USD as of the time of writing.
Technical Outlook for USDNOK
The USDNOK is now testing support at the 8.39643 price level, which is the site of recent lows. A breakdown of this support brings 8.18807 into the picture. This move also takes the pair to levels not seen since October 2018.
On the flip side, a transient recovery takes the pair towards 8.65723, with 8.80393 and 9.04414 serving as immediate targets to the north.
USDNOK Daily Chart
