USD/NOK tilts upwards after strong Norway retail sales data
- The USD/NOK pair rose slightly after the latest Norwegian retail sales numbers.
- Retail sales rose by 5.8% year-on-year in May this year.
- Focus shifts to the upcoming OPEC+ meeting on oil supply.
The USD/NOK pair rose slightly on Monday even after the relatively strong Norwegian retail sales numbers. Focus shifts to the upcoming OPEC+ meeting and US non-farm payrolls numbers. It is trading at 8.5083, which is about 0.67% above the lowest level last week.
Norway retail sales
The Norwegian economy is expected to continue doing well as the country ramps up its vaccination drive and as oil prices rise. Data published on Monday showed that the country’s retail sales jumped in May. The overall sales tose by 5.8% year-on-year after rising by 0.4% in the previous month.
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Like in most European countries, the biggest contributor to the robust sales was clothing as people started traveling. Clothing and furniture stores rose while grocery stores and e-commerce declined. In total, retail sales rose by 5.4% from May 2020 to May 2021.
Other economic data from Norway have been relatively strong. The manufacturing and services PMIs have jumped while household consumption has increased. Norway’s Inflation, on the other hand, has eased slightly.
Analysts at ING expect that the USD/NOK pair will react to the upcoming OPEC+ meeting. In it, the leaders will deliberate on the actions to take now that the price of crude oil has surged. Brent has risen to more than $75 while West Texas Intermediate (WTI) has risen to $74. Some analysts expect that the members will start raising production by about 500,000 barrels per day.
The OPEC+ meeting is important for the USD/NOK because Norway is a leading exporter of crude oil. The country exports more than 1.1 million barrels per day. As such, the Norwegian krone does well when the price of oil rises. The ING analysts noted:
“We expect EUR/NOK to end the year at 9.80 and NOK to be one of the few currencies to make gains against the dollar – even with the Fed turning a little more hakwish.”
The pair will also react to the latest US non-farm payrolls that will come out on Friday. The numbers are expected to show that the economy added more than 200k jobs in June while the unemployment rate declined to 5.7%.
USD/NOK technical analysis
The USD/NOK has dropped substantially in the past few days. It has moved from 8.7177 to today’s 8.5172. On the four-hour chart, the pair is stuck at the 25-day and 50-day weighted moving averages (EMA). It is also slightly above the important support that is shown in blue. This support connects the highest levels in May. The Relative Strength Index (RSI) has also moved from the overbought level of 85 to 50. Therefore, the pair may keep falling as bears target the next support at 8.400.