The EUR/NOK currency pair extended gains to a fresh 17-week high of 11.9820 on Tuesday ahead of the outcome of the European Central Bank’s and Norges Bank’s policy meetings.
The European Central Bank is largely expected to keep its main refinancing operations rate intact at 2.15% at its December 18th policy meeting.
And, the ECB deposit facility rate is expected to be kept at 2.00%.
ECB policy makers continued to argue that the current stance remained appropriate and that short-term inflation deviations did not require a response.
ECB officials have stressed that the next move could go either direction, reinforcing their neutral posture. Recent economic data supported this view, while markets have begun assigning a modest probability to a rate hike next year.
With the economic and inflation outlook broadly in line with the ECB’s September forecasts, several policy makers argued that the monetary easing cycle might have already reached its endpoint, as long as current favorable conditions are present.
Meanwhile, Norges Bank is expected to leave its key policy rate without change at 4% at its December 18th meeting.
In November, the central bank reiterated that in case the economy developed broadly as projected, the policy rate would likely be reduced further next year.
The EUR/NOK currency pair was last up 0.47% on the day to trade at 11.9794.
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