The NOK has pulled back from the lows vs. the USD and the EUR in March aided, it appears, by FX intervention by the Norges Bank. But, in the current environment, the NOK remains vulnerable, according to Rabobank.
Key quotes
“Not only will revenues be severely impacted by the fall in oil-related revenues but domestic demand will also be hard hit as jobs are lost.”
“An interest rate hike seems unlikely in the current environment, so further intervention to stabilise the currency cannot be ruled out.”
“We see limited scope for a recovery in the NOK in the coming months and have revised up our forecast for EUR/NOK to 11.50 in a 3-month view from 11.20.”
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