Norwegian Krone Falls After Surprise Rate Cut as Global Inflation Outlook Clouds Monetary Policy

Investor sentiment was rattled on Thursday as central banks in Norway and Switzerland made unanticipated policy moves, adding to the complexity of an already unpredictable global monetary landscape. In a surprising turn, Norges Bank cut its key policy rate, prompting a sharp slide in the Norwegian krone (NOK) against the U.S. dollar (USD) and the euro (EUR). On the same day, the Swiss National Bank (SNB) lowered borrowing costs to 0%, defying expectations of a return to negative interest rates.

These decisions highlight a broader shift in how central banks are navigating an environment marked by U.S. tariff policy, rising geopolitical risks in the Middle East, and persistent dollar instability. The increasingly fractured outlook on inflation, growth, and trade is forcing monetary authorities to recalibrate their strategies in real time.

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