The Norwegian krone has proved the top performing major versus the USD and EUR over the last year. Key to the outperformance has been monetary tightening byt the Norges Bank, which is set to continue supporting NOK, economists at CIBC Capital Markets report.
Oil prices to reverse some of its gains in 2022
“We look for another 25bps tightening to come at the 16 December meeting, in line with the updated Monetary Policy Report.”
“While the macro rebound and uptick in the oil sector are seen to justify policy action, the obvious differential between the Norges Bank and most other major central banks is that the tightening cycle is framed by an inflation profile which is set to remain below target over the forecast horizon.”
“Our global base case has crude oil prices reversing some of its gains in 2022, which could have the central bank pushing back a bit on the degree of tightening ahead.”
“Although we continue to expect NOK gains versus the EUR, they are set to be less aggressive in the next 12 months compared to the last.”
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.