Norwegian Krone: Weaker after Norges Bank holds rates – Danske Bank
Danske Research Team notes that Norges Bank left its policy rate at 4.25% and kept a tightening bias despite weaker summer inflation. They still expect one final hike in September, though the odds have fallen and the decision is now finely balanced.
The Norwegian Krone (NOK) weakened after Norges Bank maintained its policy rate at 4.25%, despite weaker-than-expected summer inflation and a tightening bias. The Monetary Policy Committee reiterated that inflation remains too high and may necessitate a rate hike in September, though the probability has decreased. Wage growth slowed to 4.0% year-over-year in Q2, below the bank's 4.5% estimate for 2026, which could indicate faster-than-expected wage growth deceleration.
Oil investment revisions showed slight declines for 2026 and 2027, leaving the release neutral for Norges Bank. Meanwhile, the Swedish Krona (SEK) showed minor recovery, while the Euro-Dollar (EUR/USD) pair remained near a one-week low.
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