Economists at Danske Bank believe EUR/NOK is now at a turning point and pencil in a weaker NOK going forward. They forecast a weaker NOK at 10.10 in one month (from 10.00), and 10.50 in 12 months (from 10.30).
A EUR/NOK turning point is likely during spring
“While we have emphasized 10 reasons for a weaker NOK, we once again highlight the importance of the industrial cycle, USD real rates, the USD and by extension commodity prices.”
“We now forecast EUR/NOK at 10.10 in 1M (from 10.00), 10.30 in 3M (10.10), 10.40 in 6M (10.20) and 10.50 in 12M (10.30).”
“The biggest risk factors to our forecasts lie in the global reflation theme and thereby not least USD real rates, risk appetite, oil and vaccine rollouts. Better news and/or a more patient Fed than in our baseline would support reflation underpinning a continued strengthening of NOK. On the other hand, marked risk-off could trigger a larger-than-projected setback.”
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