USD/NOK settles below 3-week high, posts weekly gain

The USD/NOK currency pair settled below recent high of 10.0577, its strongest level since September 5th, after US PCE inflation data met expectations and reinforced bets that the Federal Reserve could ease policy further this year.

Annual core PCE inflation has remained steady at 2.9% in August, while annual PCE inflation has accelerated to 2.7% from 2.6% in July.

Markets are now pricing in about an 85% chance of a 25 basis point Fed rate cut in October and a 33% chance of another 25 bps cut in December.

The Fed lowered its federal funds rate target range by 25 basis points to 4.00%-4.25% at its September meeting.

Federal Reserve Chair Jerome Powell said this week the US central bank had to continue balancing the competing risks of high inflation and a weakening job market in its future policy decisions.

Elsewhere, the seasonally adjusted unemployment rate in Norway has risen to 4.9% in August from 4.5% in July.

The number of unemployed persons rose by 16,000 from a month ago to 152,000.

On the global trade front, US President Donald Trump announced a new round of tariffs on imported drugs, trucks and furniture, which will take effect on October 1st.