FX.co ★ Norwegian Krone Strengthens to Four-Month High

The Norwegian krone recently strengthened to approximately 9.9 per US dollar, achieving its highest level since September 23. This rise followed the Norges Bank's decision to maintain interest rates and confirm its December policy outlook, which anticipates one to two rate reductions by 2026. The central bank held the policy rate at 4% and indicated that rates might be reduced later in the year, provided the economy aligns with forecasts. This stance countered market speculation that the ongoing geopolitical uncertainties could trigger an earlier rate cut. Officials stressed the importance of maintaining a restrictive monetary policy, given that inflation remains above target levels. Furthermore, the krone gained from improved risk sentiment after U.S. President Donald Trump decided against imposing tariffs on several European nations opposed to his Greenland acquisition plan. He also outlined a framework for future Greenland negotiations with NATO, which alleviated some tensions, though geopolitical uncertainty continues to be a concern.