Norges Bank could be near to end of the rate cycle. But in the view of economists at Commerzbank, there is a high potential for surprises in EUR/NOK at the lower end.

End of the rate cycle in Norway in sight?

“It seems as if the end of the rate cycle in Norway is slowly approaching, as long as there are no surprises on the inflation and economic front. However, as the market is already expecting that and is pricing in rate cuts for the end of the year, this prospect is not putting pressure on NOK. 

“If the economic data was to improve with price data coming in above expectations the market is likely to reduce its rate cut expectations again, which is likely to support NOK.”

“There is a higher potential for surprises in EUR/NOK at the lower end.”