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The Norges Bank is seen as the most hawkish central bank in the G10 FX camp by economists at ING. This should underpin the Norwegian krone. Therefore, the EUR/NOK is expected to pierce below the 10.00 level this summer.  

Norges Bank to offer a helping hand to NOK

“Despite the lower than expected May CPI, the case for a September NB hike remains. Price pressures are in place, the economy is doing well, oil prices are pushing higher and NOK is not overly strong. Two NB hikes in 2H21 (the second hike in December) seem likely.”  

“With NB being the most hawkish central bank in the G10 FX space, this should provide further support to NOK. NOK should offer the highest carry among G10 FX by the year-end.”

“The dovish Fed, soft USD and the suppressed volatility environment should further benefit the pro-cyclical NOK, which exerts one of the highest betas in the G10 FX space. EUR/NOK to persistently break below the 10.00 level this summer.”