Norwegian Krone: Norges Bank weighs inflation and growth – Commerzbank

Commerzbank's Antje Praefcke shares concerns about whether Norges Bank will raise interest rates in September or postpone until December. Despite a recent dip in inflation, it remains above the target, while growth is nearly normal. The regional survey is considered crucial, with oil prices and Middle East developments as the main influencers of the Norwegian Krone.

Norway's economy may also be affected, as Norges Bank may either raise its policy rate in September or wait to see. Inflation has been significantly higher than the 2% target since July, with core inflation at 2.7%, and rising business costs are expected to keep inflation elevated. The question now is whether Norges Bank will adjust its inflation forecasts downward in September or not.

A report indicating strong demand, rising wages, and high capacity utilization could prompt an early rate hike. However, if companies are less optimistic about the next six months, Norges Bank will likely maintain the current rate and wait until December for more information. USD/USD maintains a bearish stance for the third consecutive day, staying near a two-week low, while the Fed's anticipated rate hike and oil-driven inflation fears keep US bond yields at a multi-year peak.

Escalating tensions in the Middle East bolster the US dollar as a safe-haven currency and hinder the Australian dollar. USD/JPY reaches a new one-week high above 155.00 in the Asian session due to a strong US dollar, driven by oil-inflated inflation concerns and the anticipated Fed rate hike. Gold remains below $4,350, and the US dollar temporarily consolidates after reaching a two-week high, providing some respite for the commodity. Traders, however, remain cautious and prefer to wait for the Fed decision.