EUR/NOK eases from 1-month high after inflation data

The EUR/NOK currency pair pulled back from a one-month high of 11.7956 on Tuesday, as investors weighed the latest inflation figures from Germany and Norway and as the European Central Bank is expected to set monetary policy later this week.

Final data showed on Tuesday that annual consumer price inflation in Germany had been confirmed at a four-month high of 2.2% in November. That was an acceleration from 2% in October and it matched the preliminary figure.

German core CPI inflation picked up to a six-month high of 3% in November.

Separately, data out of Norway revealed that annual consumer inflation had eased to 2.4% in November from 2.6% in October. It has been the lowest inflation rate since December 2020 mostly due to a slowdown in housing and utility costs.

And, annual inflation adjusted for tax changes and excluding energy products (CPI-ATE) was reported at 3% in November, while picking up from 2.7% in October.

Market focus now sets on the ECB meeting on Thursday. The European Central Bank is largely expected to lower its main refinancing operations rate by 25 basis points to 3.15% at its December policy meeting, while its deposit facility rate is expected to be reduced to 3.00% from 3.25% currently.

The EUR/NOK currency pair was last edging down 0.27% to trade at 11.7019.