Summary:

• Scandi currencies are on the rise today
• SEK and NOK among the best performers in G10
• Hawkish Riksbank minutes and CPI data behind the moves

A look across the G10 space today reveals that Scandinavian currencies are performing well with the SEK and NOK both rising strongly. The NOK is at present the second best performer behind JPY and despite a bit of a pullback in the last hour or so USDSEK remains higher by 0.6% on the day. 

 SEK and NOK are both on the rise today and are amongst the best performers in the G10 space. Source: xStation

 The cause behind the move higher in the Swedish currency is likely down to the publication of the minutes from the most recent Riksbank meeting. The Swedish central bank concluded their last monetary policy meeting on the 20th December 2017 and there was something of a hawkish surprise here. Governor Ingves said that he hopes to raise rates before the ECB. 

Turning our attention to their neighbour, Norway this morning reported a pick up in inflation which has supported NOK. Recent years have seen a sharp decline in the CPI reading for Norway but the latest figures have shown a rise. Whilst inflation remains well below target the markets appear to be thinking that the declines may be over and that going forward prices will rise once more. 

 Norwegian inflation has picked up according to the latest figures and this has contributed to today’s rise in NOK. Source: XTB Macrobond

The rise in the Norwegian Krone has seen USDNOK fall back down to its lowest level since late October. 8.0275, the low seen last week, now takes on a greater importance as it appears that a retest could occur soon. A break below here would be a pretty major development technically speaking and could see further declines ahead towards 7.70. Alternatively if the bulls can defend this line then a recovery may occur and some of the steep declines seen from the December highs above 8.40 may be recouped.

 The USDNOK has fallen to test a potentially pivotal level around 8.02. The reaction at this point could well determine the next sustained move. Source: xStation