The USD/NOK currency pair settled above recent low of 10.0211, its weakest level since November 14th, after the delayed September PCE inflation data reinforced bets on another interest rate cut by the Federal Reserve next week.
Annual PCE inflation has accelerated to 2.8% in September, or the highest level since April 2024, from 2.7% in August. That figure came in line with market expectations.
And, annual core PCE inflation has eased to 2.8% in September from 2.9% in August.
The rate cut case has also been bolstered by weak US labor market data and dovish comments by Fed Governor Waller and New York Fed President Williams.
Markets are now pricing in about an 87% chance of a 25 basis point Fed rate cut in December, compared to an 85% chance a week earlier.
Markets are also pricing in three additional rate cuts by the end of 2026.
“With the Fed meeting next week the big debate is whether they can cut rates to support the job market with inflation above their target and this morning’s PCE numbers show that inflation is stable, so they will be able to cut interest rates by 25 bps, although there will likely be some discussion – and potential dissent – about inflation remaining sticky and not approaching the 2% target any time soon,” Chris Zaccarelli, chief investment officer at Northlight Asset Management was quoted as saying by Reuters.
Meanwhile, the latest data out of Norway showed that manufacturing production had shrunk 0.9% month-over-month in October, after a 1.4% drop in the prior month.
The exotic Forex pair lost 0.11% for the week.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
