Norges Bank

The Norwegian Krone rallied broadly in the final session of the week as new highs for local inflation prompted the market to reconsider the outlook for Norges Bank interest rates and drove GBP/NOK further away from post-pandemic highs in what could be the beginning of a deeper setback for Sterling. 

The Swedish Krona has outperformed notably in 2023 but was this week tipped as a sell by strategists at TS Lombard, who've advocated that clients buy the Norwegian Krone with the proceeds due to differences between inflation rates and risks embedded in the respective economies.

The Norwegian Krone meandered along the middle of major currency road Tuesday but could accelerate through the 2021 rankings this summer as Europe frees itself from a coronavirus vaccination mire, a global economic upswing lifts oil prices and the Norges Bank raises interest rates before any of its peers.

The Krone tumbled on Tuesday but remained a leading contender for outperformance in 2021, according to analysts at Nordea Markets, Goldman Sachsand HSBC among others, who cite the likelihood of Norges Bank interest rate rises this summer for upgraded or otherwise simply bullish forecasts. 

The Norwegian Krone was a middle of the road performer among major currencies on Thursday, enabling GBP/NOK to arrest an earlier decline as the Nordic currency took in its stride suggestions from the Norges Bank that it could begin lifting interest rates before the year is out.