EUR/NOK: Many risks lurk around for the Krone – Nordea
|EUR/NOK has risen to 11.80 and USD/NOK is yet again trading above 11. Economists at Nordea analyze Krone’s outlook.
EUR/NOK to hover around 11.50 through year-end and until next summer
For the NOK to do well we probably need the current rates environment to turn around. A goldilocks scenario, where inflation and rates come down while economic activity remains robust, would be the best outcome for the NOK. It will take time, however, before inflationary pressures are reduced sufficiently for central banks to start cutting rates.
As such, the NOK will likely remain weak for some time and remain vulnerable to global developments. There is no guarantee that the global economy will come out on the other end unharmed.
We keep our view for EUR/NOK around 11.50 through year-end and until next summer, but expect large swings around this level.
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