The USD/NOK currency pair extended its pullback from a 3 1/2-year low of 9.4325 on Friday ahead of the key US CPI inflation report due later today, which may provide further clues over the Fed’s monetary easing path.
Annual headline consumer inflation in the US probably eased to 2.5% in January from 2.7% in December, according to market consensus.
And, annual core CPI inflation probably eased to 2.5% in January from 2.6% in December.
The US Dollar has received support after stronger-than-expected US labor data prompted investors to pare back expectations of near-term Federal Reserve rate cuts.
The US economy added 130,000 jobs in January, a figure that topped expectations of 70,000, following a revised 48,000 job growth in December.
As a result, markets are now pricing in a 95% chance that the Fed will hold rates steady in March. Yet, investors still expect two 25 basis point rate cuts later this year, with the first likely in June.
Meanwhile, in Norway, annual CPI inflation has picked up to 3.6% in January, the latest data showed, from 3.2% in December. It has been the highest inflation rate since September 2025.
And, Norway’s annual inflation adjusted for tax changes and excluding energy products (CPI-ATE) has accelerated to 3.4% in January from 3.1% in December.
Inflation has remained well above Norges Bank’s target, which suggests a restrictive monetary policy is still necessary.
The USD/NOK currency pair was last up 0.30% on the day to trade at 9.5450.
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