The USD/NOK currency pair settled above Friday’s low of 9.9668, its weakest level since October 9th, as the latest US CPI data added to expectations of more Federal Reserve interest rate cuts.
The report, which has been delayed by the US government shutdown, showed that annual headline consumer inflation had picked up to 3% in September, the highest rate since January, from 2.9% in August. Yet, the acceleration was slower than forecasts of 3.1%.
Annual core CPI inflation eased to 3% in September from 3.1% in August.
“The headline was a bit softer than expected,” Marc Chandler, chief market strategist at Bannockburn Capital Markets, was quoted as saying by Reuters.
“The dollar was sold on the news, even though the market had nearly 100% confidence before the report that the Fed would cut rates, not only next week, but in December.”
Markets are now pricing in about a 94.5% chance of a 25 basis point Fed rate cut in October and a 92% chance of another 25 bps cut in December.
Developments surrounding US-China trade negotiations also remain in focus. US President Donald Trump is to meet Chinese President Xi Jinping next week as part of a trip to Asia. Trump has said he expects to secure a fair trade deal with China.
The exotic Forex pair lost 0.53% for the week.
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