Norwegian krone (NOK), Mexican peso (MXN), Japanese yen (JPY) currency analysis
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Norges Bank holds the key rate at 4.5%, signalling that easing may only begin in late 2025. This leaves Norway with the third-highest real yield in the G10.
Brent’s growth has increased petroleum revenues and trimmed the current-account deficit just as the krone’s real effective exchange rate was near a 30-year low. The spot has already retreated from the January high, but experts still suggest NOK is undervalued by 8–10%.
If oil prices stabilize or the government reins in spending in the revised budget, USDNOK can return to the high 9s.
USDNOK, weekly
USDNOK crossed MA200 after a short-term bearish trend and dropped to a strong support area. At the same time, the price fell below the nearest fractal, and Chaikin fell below 0.
• If the price consolidates below 10.100, the fall will continue to 9.700 and further to 9.500.
The Bank of Mexico cut the overnight rate to 8.50%, leaving Mexico with the highest real yield in the OECD. Record USD 214 billion remittance inflows and a quasi-balanced current account underpin external financing.
USDMXN is already trading below 19.00. Pullbacks to this level have been greeted by new long-peso buying, with spot buyers targeting 18.50 or 18.00 as a goal for Summer.
The most risky factor is a possible sudden increase of the US tariffs on the automotive industry. Historically, every 10% increase in tariff equals about one peso per dollar within two weeks in exchange rate.
USDMXN, Weekly
After a short growth, USDMXN started falling again, and the price dropped to MA200 and a strong support area. AO confirms the growing bearish sentiment.
• We consider selling USDMXN only on consolidation below MA200 and 19.000 with targets of 18.500 and 18.200.
The yen may deliver the most spectacular turnaround of the year. The Bank of Japan abandoned negative rates in January and has announced a rate of 0.75% for the first time in decades.
At the same time, the Fed hints at cutting the rate twice by September, which could halve the Fed–BoJ two-year spread and undermine dollar carry.
Safe-haven demand is exaggerating the move: USDJPY was unable to sustain the 146 peak in early May, and the recent break below 140 reflects increasing bids for yen protection amidst high equity volatility. A fall towards the 133–137 area is possible if global growth uncertainty lingers.
USDJPY, weekly
On the weekly chart, USDJPY has formed a head and shoulders pattern and the price has reached the neckline.
• We consider selling USDJPY only if it falls below 142.500 and the nearest fractal with a target of 137.000 and further 133.000.
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*Tips and analytics do not constitute a call to trade, trading advice or recommendation and are for information only.
