US Dollar/Norwegian Krone FX Spot Rate

Norges Bank raised its policy rate by 25 basis points to 4.50%, a hawkish move that lifted the Norwegian Krone, according to Brown Brothers Harriman's Elias Haddad. The krone outperformed following the decision, which BBH characterized as hawkish. Haddad, of Brown Brothers Harriman, highlighted the currency's strength after the rate increase. The hike brought the benchmark rate to 4.50%.

Nordea strategists expect the Norwegian Krone to remain broadly stable over the next six months, following July's decline in EUR/NOK driven by higher oil prices and increased NOK purchases by Norges Bank. The bank also sees the Krone strengthening against the Euro in 2027.

UBS has added the Norwegian krone to its list of top currency picks, expecting global oil market adjustments to cap crude prices and reduce the need for further central bank rate hikes. The bank sees Brent crude unlikely to remain above $100 a barrel in the near term, which should allow most G10 central banks to keep policy unchanged. UBS continues to favor higher-yielding and pro-growth currencies, rating the Swedish krona, New Zealand dollar, Australian dollar, British pound, Chinese yuan and Norwegian krone as attractive. It maintains a neutral stance on the euro, forecasting a 1.14-1.20 range against the dollar, and expects the Swiss franc to underperform as a funding currency. In emerging markets, UBS favors diversified exposure to high-yielding currencies including the South African rand, Brazilian real, Mexican peso and Indian rupee, while taking a more cautious view on the Turkish lira.

The Norwegian Krone weakened in June, with EUR/NOK peaking near 11.35, but Nordea now sees limited further upside. Senior Macro and FX Strategist Sara Midtgaard notes that the currency is supported against the Euro as NOK flows increase.