Rate cut speculations weigh on the NOK

Rate cut is the major issue currently driving NOK exchange rates. Following recently improved economic data market participants had doubted a Norges Bank rate cut this month. After all, the central bank's plan was based on the assumption that the lower oil price was going to have an even more pronounced effect on the economy, notes Commerzbank. 

The surprising collapse of the PMI for the manufacturing trade yesterday now suggests that Norges Bank might be correct with this assumption. And as a result a rate cut is suddenly back on the agenda. There is no further data due for publication from Norway today, so unless EUR suddenly has a moment of weakness EUR-NOK will have to get used to these higher levels for the time being.