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NOK Price Analysis and Talking Points:

  • Norges Bank: Only G10 Central Bank to Hike
  • Focus on the Rate Path

See our quarterly FX forecast to learn what will drive prices throughout Q1.

Norges Bank: Only G10 Central Bank to Hike in Q1

The Norges Bank are expected to raise interest rates at the March 21st meeting by 25bps to 1%. Since, the January meeting, data has largely been in line with the central bank’s economic projections. Alongside this, a weaker than expected NOK with oil prices pushing to 4-month highs (Norwegian break-even oil price at $30/bbl) and inflation above forecasts (CPI-ATE 2.6% vs. NB forecast of 2%), not only makes a rate hike at the upcoming meeting a done deal, but also advocates the case for a faster than expected rate path.

Focus on the Rate Path

However, while Norway has been somewhat insulated from the weakness seen in the Eurozone and China, the decline in rate expectations abroad (most notably the Fed and ECB) could see the Norges Bank not only reiterate their gradual approach to rate rises, but also lower their rate path in the longer run as opposed to the near-term where two hikes for 2019 is still expected.

Consequently, eyes will be on the rate path guidance from the Norges Bank, which could state that “The boards current assessment of the outlook and balance of risks suggest that the key policy rate will most likely be raised after summer 2019”, which in turn would make September a live meeting (Guidance similar to last year).

EURNOK Chart: Daily Time Frame (Sep 2018 – Mar 2019)

Norges Bank: The Only G10 Central Bank to Raise Interest Rates

A signal from the Norges Bank that they will continue raising interest rates, leaving a Q3 hike on the table could see support at 9.65 break, extending a move towards 9.55. Given the robust state of the Norwegian economy relative to the Eurozone and with oil prices hovering around 4-month highs a bearish EURNOK outlook looks promising.


--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at

Follow Justin on Twitter @JMcQueenFX