At its meeting in June Norges Bank had sent out a restrictive signal. It hiked the key rate by 50 bps to 3.75% and signalled a further rate step for August. It is likely to deliver that today.

As the market has priced in today’s step, it is likely to have a limited effect on NOK. 

If the accompanying statement sounds hawkish the market might raise its expectations for September slightly, which would support NOK. 

If future price data surprise on the upside whereas economic data illustrates that the Norwegian economy is resilient, the market will increasingly share Norges Bank’s view – a terminal rate of 4.25% – in support of NOK.