Currency Analysis Report - 8/25/20...More Downside Risks On USD/NOK

Norway’s currency is called the Norwegian Kroner. And it’s a commodity currency. A commodity currency is a name given to currencies of countries which depend on the export of certain raw materials for income. The major currencies that are considered “commodity currencies” are the Australian dollar, Canadian dollar, and New Zealand dollar.

Because Norway has a pretty big oil reserve and has one of the world’s biggest wealth fund and has never resorted to negative rates or quantitative easing. Earlier this year, Kjersti Haugland, chief economist at Norway’s biggest bank DNB ASA, said she doesn’t expect the adverse affects of COVID-19 to trigger any Norwegian rate cuts in 2020. But Economists at Goldman Sachs thinks because all the other central banks around the world are cutting rates, Norway won’t be far behind.

While many around the world remained optimistic against the fight with COVID-19, many around the world are facing the harsh reality of things.

Norges Bank said it will probably need to keep interest rates at a record low for “some time ahead” to give the economy room to recover from the Covid-19 crisis.

The Oslo-based central bank left its benchmark rate at zero on Thursday, where it’s been since a series of emergency cuts at the height of the Covid-19 crisis earlier this year.

But in Thursday’s statement, Norges Bank said there’s “considerable uncertainty surrounding the further economic recovery.” The bank cited an increase in the spread of Covid-19, which is forcing the reintroduction of restrictions on movement.

So where is the Kroner heading against the US dollar, lets go to the charts?

Monthly Chart (Curve Time Frame) - there is no monthly supply and the monthly demand is at 8.50000.

Weekly Chart (Trend Time Frame) – the trend is sideways with downside momentum.

Daily Chart (Entry Time Frame) – the chart suggests to keep your hand away from the mouse as there is nothing to do at the moment on this forex pair.

This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.

Posted Using LeoFinance