The USD/NOK currency pair settled above recent low of 9.7330, its weakest level since December 15th 2022, in the wake of the Federal Reserve’s and Norges Bank’s policy decisions.

The Fed lowered its federal funds rate target range by 25 basis points to 4.00%-4.25% at its September meeting and indicated another 50 basis points of rate cuts by the end of the year.

Fed Chair Jerome Powell described the September policy action as a risk-management cut addressing the weakening labor market. Powell also noted the central bank was in a “meeting-by-meeting situation” in regard to the rate outlook.

Markets are now pricing in about a 92% chance of another 25 basis point Fed rate cut in October.

Meanwhile, Norges Bank lowered its key policy rate by 25 basis points to 4% at its September meeting, as anticipated.

It has been the second rate cut in five years after the brief pause in August.

Norges Bank signaled that it would continue easing policy next year in case the economy developed as expected.

The central bank noted that the policy rate would likely be gradually reduced to 3% in upcoming years, while inflation is forecast to steady near 2% by 2028.

The exotic Forex pair gained 1.00% for the week.