EUR/NOK expected to grind lower in the near term – Danske Bank

Senior Analyst at Danske Bank Mikael Milhoj sees the Norwegian Krone to pick up further pace in the next months.

Key Quotes

“With regard to the NOK, the main economic release will be the NAV unemployment (due Friday), which could continue to come down despite last week’s surprisingly weak LFS data, providing mixed signals to policy makers”.

“In the meantime, markets will continue to absorb the fairly hawkish outcome of last week’s Norges Bank meeting, which has raised downside risks to our EUR/NOK forecast”.

“A breach of important downside technical barriers in the coming days is likely to send the cross lower, which, given the latest change in positioning, could open up for attractive tactical buying opportunities”.

“We only expect the EUR/NOK to move sustainably lower in 2017 when valuation, positioning, a gradually higher oil price, relative rates and fundamentals are likely to weigh on the cross”.