NOK seen grinding lower medium term – Danske Bank

Pablo Piovano FXStreet

Allan von Mehren, Chief Analyst at Danske Bank, expects the Norwegian Krone to gather further downside pressure in the next months.

Key Quotes

“Following the Norges Bank meeting yesterday, global developments will be an important driver for NOK in the near-term; not least the development in the oil price as NB yesterday restated that the stronger NOK ‘partly’ reflects higher oil prices”.

“As we expect the oil price to fall in the coming months and given an unfavourable year-end liquidity environment for the NOK, we think the NOK will weaken in the coming months, forecasting EUR/NOK at 9.10 in 1M and 9.20 in 3M”.

“This view supports NB keeping rates unchanged in December also. In 2017, we expect a gradual appreciation of the NOK on a higher oil price, fundamental valuation and real rate differentials”.

1. R3 9.1051
2. R2 9.0702
3. R1 9.0411
PP 9.0062
1. S1 8.9771
2. S2 8.9422
3. S3 8.9131

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

EUR/USD flat lines below 1.1900; divergent Fed-ECB expectations offer support

The EUR/USD pair struggles to capitalize on the overnight bounce from the 1.1835-1.1830 region and oscillates in a narrow band during the Asian session on Thursday. Spot prices currently trade around the 1.1875 area, remaining nearly unchanged for the day and staying within striking distance of an over one-week high, reached on Tuesday, amid mixed cues.

GBP/USD slips heading into the Thursday trading window

The Pound Sterling pulled back from four-year highs on Wednesday, weighed down by a combination of Bank of England dovishness and UK political uncertainty, even as the US Dollar weakened on soft labor market revisions.

Gold posts modest gains above $5,050 as US-Iran tensions persist despite strong labor data

Gold price trades in positive territory near $5,060 during the early Asian session on Thursday. The precious metal edges higher despite stronger-than-expected US employment data. The release of the US Consumer Price Index inflation report will take center stage later on Friday.

Bitcoin holds steady despite strong US labour market

Bitcoin briefly bounced from $66,000 to above $68,000 but slightly reversed those gains following Wednesday's US January jobs report. The top crypto is hovering around $67,000, down 2% over the past 24 hours as of writing on Wednesday.

The market trades the path not the past

The payroll number did not just beat. It reset the tone. 130,000 vs. 65,000 expected, with a 35,000 whisper. 79 of 80 economists leaning the wrong way. Unemployment and underemployment are edging lower. For all the statistical fog around birth-death adjustments and seasonal quirks, the core message was unmistakable. The labour market is not cracking.

XRP sell-off deepens amid weak retail interest, risk-off sentiment

Ripple (XRP) is edging lower around $1.36 at the time of writing on Wednesday, weighed down by low retail interest and macroeconomic uncertainty, which is accelerating risk-off sentiment.