EUR/NOK to come above 12 as Krone will weaken further until the summer – Nordea
|Economists at Nordea answer some questions that keep reappearing when discussing the Norwegian Krone and Norges Bank.
At what level will Norges Bank intervene?
“If EUR/NOK rises from 12 to 14 over the duration of a month no intervention will come, but if EUR/NOK rises from 12 to 14 in one day, then it is likely that Norges Bank will step in.”
What is most likely to happen with the NOK after Norges Bank’s May meeting?
“We believe that talk and speculation of a 50 bps rate hike from Norges Bank this week could leave some participants wrong-footed. If Norges Bank hikes by 25 bps, as we expect, the NOK will likely weaken further.”
What is Nordea’s base case for the NOK?
“We expect the NOK to weaken further until the summer, with EUR/NOK coming above 12. However, after the summer, the NOK sales will be wound down and most central banks will pause their rate hikes. We see a lower EUR/NOK towards year-end, closer to 11.00, but the NOK will likely remain weak in a historic context for some time.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.