Home EUR/NOK to tick down towards 9.80 as monetary policy support for the krone is stable – Credit Suisse
FXStreet News

EUR/NOK to tick down towards 9.80 as monetary policy support for the krone is stable – Credit Suisse

Analysts at Credit Suisse still see scope for key pro-cyclical EUR crosses to move lower, targeting EUR/NOK 9.80, as fiscal FX flows are set to support the krone ahead of elections.

Limited scope for further hawkish repricing in Norway

“Resilient oil prices and still-elevated inflation prints continue to support current monetary policy expectations, but leave limited scope for further hawkish repricing. With OPEC+ starting to normalize supply starting May, and oil prices in line with Norges Bank’s estimates, the bar for further hawkish shifts in policy expectations is high. A stronger NOK should also limit upside risks in inflation, and should contribute to push CPI-ATE further lower.”

“Fiscal spending-related flows are likely to be NOK-positive in Q2. This leaves us constructive on NOK even with less potential for further supportive monetary developments. We lower our EUR/NOK target from 10.05 to 9.80.”

“Sep 2021 elections should drive fiscal spending amid slow vaccination pace and lockdown threats. Labor and Center Party pose a strong challenge to incumbent Conservatives. More fiscal spending points at sustained NOK purchases from Norges Bank on behalf of the government, a short-term NOK-supportive factor.”

 

FX Street

FX Street

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions.