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The Norwegian Krone is expected to gather further ground in the medium term, according to Allan von Mehren, Chief Analyst at Danske Bank.

Key Quotes

“EUR/Scandies have so far – and should in our view continue to – be relatively unscathed by the lira crisis given the countries’ limited direct exposure to Turkey”.

“Notably, NOK found renewed support on Friday as core inflation beat estimates and as details confirmed that underlying inflation pressure is building in Norway. This is a key reason why we expect Norges Bank to reiterate its September hike signal later this week irrespective of global political developments”.

“We thus remain bullish on the NOK and expect EUR/NOK to take the next move lower over the coming 1 -3 months”.