The USD/NOK currency pair settled below Friday’s high of 10.4591, its strongest level since May 1st, in the wake of the Federal Reserve’s and Norges Bank’s policy decisions.

The Fed left its federal funds rate target range intact at 4.25%-4.50% for a third straight meeting in May, in line with market consensus.

The US central bank has adopted a wait-and-see approach amid concerns that the tariffs could push inflation higher and slow GDP growth.

At the press conference after the FOMC meeting, Fed Chair Jerome Powell noted it was too early to determine whether inflation or unemployment would emerge as the bigger concern and the central bank did not have to rush into adjusting interest rates.

In the meantime, Norges Bank left its key policy rate without change at a 15-year high of 4.5% at its May policy meeting, in line with market consensus.

The central bank cautioned that while inflation had eased from the elevated levels from 2023, it still remained above target. Any premature interest rate cuts could lead to inflation resurgence amid the uncertain economic backdrop, Norges Bank also warned.

Market players are also closely tracking developments in US-China trade relations ahead of high-profile negotiations set for this weekend in Switzerland. US President Trump has suggested that China’s current 145% tariffs could be reduced if talks progress favorably.

The USD/NOK currency pair settled 0.56% lower at 10.3453 on Friday.

The exotic Forex pair lost 0.49% for the week.