NOK seen grinding lower medium term – Danske Bank
|Allan von Mehren, Chief Analyst at Danske Bank, expects the Norwegian Krone to gather further downside pressure in the next months.
Key Quotes
“Following the Norges Bank meeting yesterday, global developments will be an important driver for NOK in the near-term; not least the development in the oil price as NB yesterday restated that the stronger NOK ‘partly’ reflects higher oil prices”.
“As we expect the oil price to fall in the coming months and given an unfavourable year-end liquidity environment for the NOK, we think the NOK will weaken in the coming months, forecasting EUR/NOK at 9.10 in 1M and 9.20 in 3M”.
“This view supports NB keeping rates unchanged in December also. In 2017, we expect a gradual appreciation of the NOK on a higher oil price, fundamental valuation and real rate differentials”.
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