USD/NOK rises after Powell’s hawkish remarks

• The USD/NOK rose towards 11.219, seeing 0.30% gains.
• The US Treasury yields are rising after Powell’s hawkish words.
• Swaps markets are pushing rate cuts to June from May 2024.
• Weekly Jobless Claims from the US came in lower than expected.

The USD/NOK is finding some lift on Thursday's session and advanced to 11.219, seeing 0.35% gains. The daily market movers included hawkish bets on the Federal Reserve (Fed) after Jerome Powell’s words and rising US bond yields, which made the pair gain traction.

Chair Powell commented on Thursday that he is not confident that the Fed has achieved a sufficient restrictive stance and warned that stronger growth could undermine the progress on inflation. As a reaction, swaps markets are starting to price in higher interest rates for a longer period of time, which is making the USD gain traction as investors are pushing rate cuts from May to June of 2024. That being said, the odds of a hike in the December meeting are still low, and the CME FedWatch tool indicates that markets are only placing 10% odds of an increase.

In addition, US yields rose, which contributed to the strength of the USD. The 2,5 and 10-year rates show more than 1.50% gains standing at 5% and 4.60%, respectively.

On the data front, the weekly US Jobless Claims from the first week of November came in lower than expected but didn’t trigger any reaction on the pair. Markets focus will now shift to next week’s Consumer Price Index (CPI) figures from the US from September.

USD/NOK Levels to watch

Based on the daily chart, USD/NOK maintains a bullish outlook for the short term, as indicators have gathered enough momentum on the daily chart which made the pair approach multi-month highs around 11.276. The Relative Strength Index (RSI) points north, above 50, while the Moving Average Convergence Divergence (MACD) prints higher green bars. 

Supports: 11.105 (20-day SMA), 11.094, 11.085.
Resistances: 11.225, 11.2550, 11.276.

USD/NOK daily chart