EUR/NOK seen slipping back to 9.10 in 12-month – Danske Bank

Senior Analyst at Danske Bank Kristoffer Lomholt sees the Norwegian Krone appreciating further in the next months.

Key Quotes

“EUR/NOK has re-settled in the lower end of the 9.40-9.60 range following a turbulent month where fading NOK headwinds were countered by a dovish Norges Bank and tumbling risk sentiment”.

“We still expect EUR/NOK to move lower on valuation and that Norges Bank has indicated in its base case already that it will out hike peers. In our view, market pricing of Norges Bank remains too soft but we are likely to have to wait for a significant repricing”.

“With year-end creating an asymmetric balance of risk to foreign developments, this creates a tougher environment for EUR/NOK to break below the 9.40 threshold this side of New Year”.

“In light of December no longer being a live meeting for the next interest rate hike, we raise our 3M forecast profile. We now forecast EUR/NOK at 9.40 in 1M (unchanged), 9.40 in 3M (9.30), 9.20 in 6M (unchanged) and 9.10 in 12M (unchanged)”.