EUR/NOK: Level of krone unlikely to overly worry Norges Bank – Rabobank

The Norwegian krone may be the second best performing G10 currency in the year to date, but the level of the currency is well below its highs of the past decade. While policy makers will likely be keeping an eye on the pace of the gain of the NOK, the move this year is unlikely to throw the Bank’s intentions of hiking rates this year off course, Jane Foley, Senior FX Strategist at Rabobank, reports.

Scope for an earlier rate move

“The expectation that Norges Bank rates will go up this year is already baked into the price of the NOK. Indeed, expectations that the Norges Bank could hike twice before the end of this year have risen this week. The absence of significant concerns about excessive currency strength affords the Norges Bank scope to act more independently of the decisions of other central banks.” 

“We continue to see room for further moderate appreciation of the NOK, to EUR/NOK 10.00 on a three-month view.”

“On a six-month view the market is currently almost fully priced for two 25 bps rate hikes. This suggests the market is looking for a September rate hike to be followed by another policy tightening in December. The Norges Bank will have ample scope for push back on this speculation at next week’s policy meeting. The guidance given at this meeting could thus be directional for the NOK.” 

“Either way, assuming that most other major central banks retain a more cautious outlook on policy for now, we would look to buy the NOK on dips vs. a range of G10 currencies including the EUR.”


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.

Feed news

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD licks its wounds ahead of US consumer confidence

EUR/USD is below 1.18 but off the lows. The dollar is paring some of its gains ahead of US Consumer Confidence, final eurozone inflation data and expiry of options on Wall Street. 


GBP/USD struggles around 1.38 after weak US Retail Sales

GBP/USD is on the back foot around 1.38 after UK Retail Sales figures disappointed with -0.9% in August, worse than expected. Brexit uncertainty and dollar demand weighed on the pair earlier. 


XAU/USD bears seize control as focus shifts to FOMC meeting

Gold witnessed aggressive selling on Thursday and tumbled to over one-month lows. Upbeat US macro data lifted the US bond yields, the USD and exerted heavy pressure. Extremely oversold RSI on hourly charts helped limit losses amid COVID-19 woes.

Gold News

Ethereum Classic Price Prediction: ETC coils up for 40% upswing

Ethereum Classic price shows choppy action as it approaches the lower trendline of an ascending parallel channel. The $52.92 support floor is likely to be tagged before a 40% upswing originates.

Read more

US Michigan Consumer Sentiment Preview: Markets will have to look hard for positive signs

Consumer outlook expected to rebound to 72.2 in September. August’s 70.2 was the lowest since December 2011. Inflation and Delta variant wearing on US optimism. Markets face negative dollar risk from fading consumer optimism.

Read more