NOK to struggle in an environment of weakening growth, tight monetary conditions and strong USD – Danske Bank
|EUR/NOK breached the 11.80 mark despite commodity prices rising over the past month, highlighting the importance of the global backdrop. Economists at Danske bank analyze the pair’s outlook.
No near-term turnaround in store for NOK
We still think NOK first and foremost should be treated as a high beta derivative of the global investment environment and in an environment of weakening growth, tight global monetary conditions and a strong USD, the NOK very rarely performs.
Additionally, the recent rise in long-end yields significantly increases the risk of a hard landing for the global economy. In that light, we also lift the long end of the forecast profile, which entails that we no longer embed a stronger NOK in our 12M forecast horizon. We still think NOK is fundamentally undervalued but we do not see the trigger for a turnaround in the next 12M.
Forecast: 11.90 (1M), 12.10 (3M), 12.10 (6M), 12.00 (12M)
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.