The Norwegian krone has strengthened nearly 20 øre against the dollar since midnight. The exchange rate made a jump shortly after fresh inflation figures came from the USA, at 2.30 pm – which showed that price growth is slowing down. Around 3.30 pm, one dollar cost around 10.5 Norwegian kroner. At the latest at the beginning of May, one dollar cost more than NOK 11. Currency strategist Dane Cekov. Photo: Benjamin Danielsen / news – This again illustrates how important the American economy and key figures are for the krone exchange rate. That is why I have said time and time again that we will see a stronger krone when the interest rate cut in the US first comes, says currency strategist Dane Cekov at Nordea. Price inflation surprised With price inflation now subsiding, there are several investors who believe that there may be an interest rate cut in September. Then the dollar weakens, Cekov explains. Price growth in the USA was still 3.3 per cent in May, compared to the same month last year. Core inflation, which excludes food and energy products, still stands at 3.4 per cent. It was a small notch, 0.1 percentage point, lower than what a majority of economists had expected in advance. Nevertheless, this is a long way above the target of the US central bank, which wants a price increase of around 2 per cent annually. Interest rate announcement tonight Tonight at 20:00 Norwegian time, central bank governor Jerome Powell will make a new interest rate announcement. It is expected that he will keep the policy rate in the US unchanged. Head of the US central bank, Federal Reserve, Jerome Powell. Photo: Reuters The most excitement is connected to what he will say about possible interest rate cuts in the future. When the US decides to cut interest rates, it has a lot to say about which way interest rates will take in Norway. Many believe that one must first see an interest rate cut in the USA before it can happen in Norway. Published 12.06.2024, at 15.57 Updated 12.06.2024, at 16.14
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