USD/NOK finds some traction despite soft US data

• USD/NOK is trading higher by 0.30%, quoted at 10.69 during Thursday's session.
• A surprise increase in Initial Jobless Claims suggests a slowing down of the US economy, which weighs on the USD.
• Markets are pricing in sooner interest rate cuts by the Fed following the recent soft CPI report.

On Thursday, the USD/NOK traded higher despite the ongoing data including April’s Consumer Price Index (CPI) reported on Wednesday which came in softer than expected. The softer data is making markets think that the Federal Reserve (Fed) might consider sooner rate cuts than anticipated. As for now, the best-case scenario for markets continues to be a first cut in September.

The US economy hints at a potential slowdown as reflected by the unexpected hike in Initial Jobless Claims and the dip in the Philadelphia Fed Manufacturing Survey, shifting markets into believing the Federal Reserve may introduce rate cuts sooner, generating downward pressure on the USD. The weekly Initial Jobless Claims for the week observed a rise to 222K, surpassing predictions, and displaying an upward revision to 232K for the previous week's data. The Philadelphia Fed Manufacturing Survey for May showed a slump to 4.5, failing to meet market expectations.

USD/NOK technical analysis

On the daily chart, the Relative Strength Index (RSI) of USD/NOK suggests negative momentum, signaled by a consistent positioning of the pair below the 50 mark. Despite the negative trend, the RSI value in the most recent session hints at potential easing, edging up to roughly 41 from a near-oversold low of 39.

USD/NOK daily chart