The USD/NOK currency pair settled above Friday’s low of 9.8252, its weakest level since January 2023, as concerns over a weakening US labor market outweighed inflation woes prior to the Federal Reserve’s policy meeting.
Annual headline consumer inflation in the US has picked up to 2.9% in August from 2.7% in July, in line with market consensus.
And, annual core CPI inflation has steadied at 3.1% in August.
Yet, initial jobless claims surged to 263,000 last week, indicating US labor market conditions softened markedly. The data followed last week’s employment report, which revealed a considerably slower than anticipated US job growth in August.
Markets are now pricing in about a 93% chance of a 25 basis point Fed rate cut next week and a 7% chance of a super-sized 50 basis point cut.
Meanwhile, the latest data out of Norway showed that annual consumer price inflation had picked up to 3.5% in August, the highest rate since February, from 3.3% in July.
Norway’s annual inflation adjusted for tax changes and excluding energy products (CPI-ATE) remained stable at 3.1% in August.
The data suggested that Norges Bank might have limited scope to cut interest rates further this year.
The exotic Forex pair lost 1.88% for the week.
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