NOK should begin to slowly appreciate over the course of the year and next – Commerzbank

Antje Praefcke, FX Analyst at Commerzbank, analyzes NOK outlook ahead of Thursday’s Norges Bank meeting.

Norges Bank unlikely to deviate from its path

I am confident that Norges Bank will get on with its plans and will hike interest rates once again on Thursday to 4.25%. If necessary, it will go higher than 4.25% which it might signal in its rate path, and will certainly underline in its statement. Moreover, it is not going to change its rate path much if it does not adjust its inflation projections significantly, which seems unnecessary. 

Everything told I expect Norges Bank to signal that interest rates might have peaked, but that it will remain vigilant and will hike rates further if necessary. It will probably continue to envisage rate cuts not before late 2024. That suggests that NOK should begin to slowly appreciate over the course of the year and next.