EUR/NOK: Potential reduction in FX purchases in December is positive for the Krone – ING
|Norges Bank will announce the amount of daily FX purchases for December today. Economists at ING analyze Krone’s outlook.
Possible reduction in December FX purchases
Our model estimate based on Oil prices and petroleum revenue forecasts suggests purchases should be kept at 1,400mn for December. However, it’s worth highlighting that Norges Bank scaled back FX operations quite substantially in December (compared to the previous month) over the past three years, more than what our model would have suggested.
We are bullish on NOK in the medium term, but we suspect the rally has started too early. That is, however, only due to external factors, as markets have priced out the chance of a Norges Bank hike in December (20% priced in now) and a potential reduction in FX purchases in December is positive for the Krone.
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.