NOK/USD Outlook:
Slightly positive, but likely to move sideways, as the rate is above its recent average and supported by oil price movements.
Key drivers:
• Rate gap: The Norges Bank is cautious, maintaining interest rates while the Federal Reserve has paused cuts, which keeps the dollar under pressure.
• Risk/commodities: Recent oil prices have risen and are above average, benefiting the Norwegian krone, an important relationship since Norway is a major oil exporter.
• One macro factor: Global de-dollarization efforts are intensifying, affecting demand for the USD and creating fluctuations in its value.
Range:
The NOK/USD is expected to hold within its recent range, with potential for minor shifts but unlikely to hit extremes in the near term.
What could change it:
• Upside risk: A significant increase in oil prices could strengthen the NOK further.
• Downside risk: Continued geopolitical tensions that negatively impact U.S. assets may weaken the dollar and also affect the NOK indirectly.
