The Norwegian krone has seen renewed support on notably the short-term theme of unwinding COVID-19 fears and the equity flows supporting materials, energy and value. But economists at Danske Bank expect the move lower to be temporary and continue to forecast EUR/NOK to move higher going into 2022.
NOK rates pricing looks elevated
“While we strategically maintain a negative view on the NOK we lower the short-end of our forecast profile.”
“We still expect EUR/NOK to move higher later in the year and highlight how weaker growth and inflation alongside tighter global liquidity conditions is set to become a considerable headwind for NOK. Also, NOK rates pricing looks elevated.”
“We forecast EUR/NOK at 9.90 in 1M (from 10.20), 10.20 in 3M (from 10.30), 10.40 in 6M (unchanged) and 10.40 in 12M (unchanged).”
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