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Analysts at Danske Bank assessed the prospects for the Norwegian Krone in the long term.

Key Quotes

“Generally speaking, the NOK FX case is little changed since the previous issue: strategically we see a strong case for a lower EUR/NOK but the near-term tactical case remains tricky”.

“The cross has for some time been rangy within 9.40-9.60 and given investor focus on historical year-end NOK vulnerability it still seems difficult to see a break below 9.40 on this side of New Year without a re-pricing of NB monetary policy”.

“However, with inflation losing momentum on lower imported inflation and domestic food prices, with NB’s conservative NOK projection for Q4 and with NB essentially having to trigger the repricing themselves (given its September communication) this is unlikely to happen in the coming weeks”.