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USD/NOK Finds Support Ahead of 50-dma

NOK
  • USD/NOK finding some support in early Monday trade to partially reverse the solid pullback noted across Weds - Fri last week. Much of the NOK rally following the higher-than-expected Norwegian Core CPI read last week - setting up the Norges Bank for not only a further rate hike next week (June 22nd) but also a sizeable upgrade for their inflation and rate path projections across the coming quarters.
  • Consensus looks for a 25bps step to 3.50% next week, but some hawkish outliers are coming through. DNB last week upgraded their NB view to a 'double' hike of 50bps - a pace last seen in Summer last year and at the first phases of the tightening cycle.
  • USD/NOK has bottomed out ahead of the 50-dma support at 10.7228, while EUR/NOK maintains the break below that key level of 11.6680 - which marked the first print below the level since December last year.
  • GDP data takes focus next, with markets expecting mainland M/M GDP to slow to 0.1% from 0.5% in tomorrow's release.

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