While energy prices might only slowly recover, NOK still enjoys significant backing from a fiscal point of view, as economists at Danske Bank note.
Key quotes
“We expect a continued strengthening of the NOK amid a shift in the underlying capital flows – stemming from the tapping of the oil fun – and stabilisation in physical energy demand as economies gradually reopen.”
“The government is likely to announce another fiscal package later this month, which would entail even more NOK buying.”
“In light of the faster than expected rally, we lower our EUR/NOK forecasts to 10.90 in 1M (from 11.30), 10.80 in 3M (11.10), 10.50 in 6M (11.00) and 10.30 in 12M (10.50).”
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