EUR/NOK dives to multi-day lows near 11.2000 post-Norges Bank

• EUR/NOK extends the weekly leg lower to the 11.25/2000 zone.
• The Norges Bank hiked rates by 25 bps to 3.00% on Thursday.
• The central bank justified its decision on the still elevated inflation.

The Norwegian kroner gathers extra steam and forces EUR/NOK to recede to multi-day lows near 11.2000 on Thursday.

EUR/NOK weaker on NB rate hike

EUR/USD added to the ongoing weekly leg lower and revisited the 11.2500/2000 band after the Norges Bank (NB) raised the policy rate by 25 bps at its gathering earlier in the session.

In fact, the Nordic central bank said the move higher in rates comes in response to the elevated inflation – which remains stubbornly above the bank’s target – and amidst rising wage growth and the persistent tight labour market, while the weaker currency has been also playing its role.

The NB, in addition, noted that the economic activity remains healthy despite the growth in the Scandinavian economy appears to be losing some momentum.

The central bank also left the door open to another hike at the May meeting in case developments play out as the bank’s expect and sees rates at around 3.5% by the summer.

EUR/NOK significant levels

As of writing the cross is retreating 0.61% at 11.2872 and a drop below 10.9694 (55-day SMA) would open the door to 10.7963 (monthly low February 10) and finally 10.7238 (100-day SMA). On the upside, the next hurdle comes at 11.4820 (2023 high March 16) followed by 11.6965 (monthly high April 22 2020) and then 13.1492 (all-time high March 19 2020).