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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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