USD/NOK: Why Norwegian krone is surging after Norges Bank cut

Norway election 2025: Labour wins 87 seats as Progress Party doubles to 48 [https://invezz.com/wp-content/uploads/2025/09/20250909_111044_Bt50G.png] The Norwegian krone is in a strong bullish trend this month, helped by the ongoing dollar weakness. The USD/NOK pair plunged in the last six consecutive weeks and moved to its lowest level since January 2023. It is down by over 15% from the highest point this year. NORGES CENTRAL BANK INTEREST RATE CUT The USD/NOK exchange rate has been in a strong downtrend this year as the US dollar index plunged. This downtrend continued this week as the Norges Bank delivered it second interest rate of the year. The bank lowered rates for the second time this year, but insisted that it may go slow amid stubbornly high inflation. In a note, the central bank governor said: > “Incoming data since June indicate that there is a little less spare capacity in the economy, and that inflation may remain elevated for a little longer than projected. We will probably not reduce the policy rate ahead as quickly as envisaged.” The most recent data showed that…