- The cross adds to yesterday’s gains and approaches 9.80.
- Norway Consumer Confidence ticked lower in Q1.
- NOK stays vigilant on Brent crude performance.
The Norwegian Krone keeps depreciating this week and is now lifting EUR/NOK to the vicinity of the 9.8000 handle, fresh 3-day peaks.
EUR/NOK looks to oil
The cross is up for the second consecutive session on Tuesday following the continuation of the offered bias around the Scandinavian currency.
In fact, NOK continues to grind lower after last week’s tops in the 9.7000 region vs. the shared currency, all amidst the recent moderate drop in prices of the barrel of the European reference Brent crude.
It is worth recalling that crude oil prices dropped at the beginning of the week after President Trump criticized the OPEC for favouring higher crude oil prices.
In the domestic docket, Norway’s Consumer Confidence dropped to 12.70 during the first quarter vs. the previous 14.20, ahead the publication of the manufacturing PMI and unemployment figures on Thursday and Friday. in Euroland, the German GfK Consumer Climate remained at 10.8 for the month of March.
What to look for around NOK
The mood around the risk complex and Brent-dynamics continue to be the main drivers for the Norwegian currency for the time being. In the broader picture, fundamentals in the Nordic economy remain strong and the Norges Bank is set to hike rates twice this year, with the next raise likely to be in March. This view has been reinforced by the December Regional Network Survey, which stressed the growth outlook for the economy remains strong. In addition, the first quarter is usually NOK-positive reinforced by tighter conditions in structural liquidity.
EUR/NOK significant levels
As of writing the cross is gaining 0.25% at 9.7768 and a break above 9.7913 (high Feb.21) would aim for 9.8411 (high Feb.11) and then 10.0572 (2018 high Dec.27). On the flip side, the next down barrier emerges at 9.7472 (21-day SMA) seconded by 9.7073 (low Feb.20) and finally 9.6891 (100-day SMA).