EUR/NOK seen higher by year-end – Danske Bank

Senior Analyst at Danske Bank Kristoffer Lomholt believes the cross could edge higher heading into year-end.

Key Quotes

“Since the summer, we have argued that the potential for a further EUR/NOK move lower in 2017 was increasingly limited on the back of, for example, the outlook for relative rates, the oil price, seasonality and speculative positioning. With the latest set of disappointing economic data releases, we think this case has been strengthened. In addition, the 2018 fiscal budget was a potential NOK positive but at a fiscal impulse of 0.1pp, it turned out neutral”.

“We maintain EUR/NOK is a range play in the very near term but still pencil in upside for the cross going into year-end. We now forecast the cross at 9.40 in 1M (unchanged), 9.50 in 3M (unchanged), 9.20 in 6M (from 9.10) and 9.10 in 12M (9.00)”.