There are some compelling reasons for NOK (Norwegian Krona) strength against SEK (Swedish Krona) as we head into year-end. Remember that one of the key trading principles is to trade a strong currency pair against a weak one. Yesterday, the Norges (Norway) and the Riksbank (Sweden) both met and decided on their current interest rate. Their outlook was very different as they showed a policy divergence.


Swedish Riksbank

They raised interest rates to 0% from -0.25% in a retreat from negative interest rates. The general view of the meeting was that the Riksbank saw this hike as a ‘one and done’ hike and expected interest rates to remain at 0% for the coming years


Norwegian Norges Bank

The Norges bank kept interest rates at 1.50% vs 1.50% expected and acknowledged a less expansionary rate path ahead. However, the have retained an upside bias with expectations of a 1.60% interest rate increase in 2020.

So these two central banks have diverging outlooks and NOKSEK looks likely to attract buyers.


Timing is everything

One aspect to be aware of is that, according to Nordea markets, Norges bank stops FX purchases for NOK which usually leaves NOK vulnerable over Christmas. Here is a chart showing the EURNOK from the day after Norges Bank stop NOK purchases in mid-December to year-end.


The timing for buyers, therefore, would be entering the market late December/early Jan to avoid any Christmas NOK weakness.




Learn more about HYCM

High Risk Investment Warning: Contracts for Difference (‘CFDs’) are complex financial products that are traded on margin. Trading CFDs carries a high degree of risk. It is possible to lose all your capital. These products may not be suitable for everyone and you should ensure that you understand the risks involved. Seek independent expert advice if necessary and speculate only with funds that you can afford to lose. Please think carefully whether such trading suits you, taking into consideration all the relevant circumstances as well as your personal resources. We do not recommend clients posting their entire account balance to meet margin requirements. Clients can minimise their level of exposure by requesting a change in leverage limit. For more information please refer to HYCM’s Risk Disclosure.

Feed news Join Telegram

Recommended Content

Recommended Content

Editors’ Picks

EUR/USD remains sidelined below 1.0600 ahead US data

EUR/USD remains sidelined below 1.0600 ahead US data

EUR/USD is trading close to 1.0600, keeping its range play intact. The US dollar stays sluggish amid a better mood, awaiting the CB Consumer Confidence data. The euro shrugs off the ECB commentary on the new anti-fragmentation tool. 


GBP/USD ranges below 1.2300 amid sluggish USD, US data eyed

GBP/USD ranges below 1.2300 amid sluggish USD, US data eyed

GBP/USD is moving back and forth in a familiar range below 1.2300, lacking a clear directional bias amid a muted US dollar index and risk-on sentiment. Ongoing Brexit and UK political woes remain a drag on the pound. US data eyed. 


Gold bears eye $1,820 and $1,816 as next targets

Gold bears eye $1,820 and $1,816 as next targets

Optimism prevails, pointing to a turnaround Tuesday for the financial markets, as the previous week’s upbeat global momentum returns and caps the broad US dollar recovery. Investors remain wary ahead of the key NATO Summit.

Gold News

Former Ripple CTO is dumping millions of XRP, traders beware

Former Ripple CTO is dumping millions of XRP, traders beware

XRP price shows promise that it is ready to trigger a massive run-up as the first half of the year comes to an end. There are three reasons why investors should be bullish on Ripple.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!