EUR/NOK: A dip under 10 will have to wait – Commerzbank

Inflation in Norway surprised to the upside in September. The krone benefited from the data but the EUR/NOK is set to stay above the 10 level for now, economists at Commerzbank report.

Inflation points towards Norges Bank tightening course

“The overall rate rose by 6.9% YoY, the core rate by 5.3%. Both rates are already above Norges Bank’s expectations according to its monetary policy report of September. First of all, that illustrates that Norges Bank will stick to its signalled rate hike cycle.” 

“The September data also increased the likelihood that Norges Bank will tighten its rate path again and might adjust the peak of its key rate.”

“The NOK was able to benefit from the publication of the data yesterday, but negative market sentiment is preventing more substantial gains – regardless of the higher oil price. For that reason, it might still take a while before EUR/NOK eases below 10 again.”