In view of Mikael Milhoj, Senior Analyst at Danske Bank, both Scandinavian currencies are expected to stabilize in the next weeks.
Key Quotes
“Both SEK and NOK have lost moderate ground in recent sessions, as USD/Scandies have returned bid amid the USD rebound”.
“As in the middle of July, liquidity remains fairly thin, leaving the two currencies vulnerable to large single orders. We expect both to stabilise as the USD momentum eases and liquidity improves”.
“On balance, we expect today’s data releases in Norway to be NOK positive but emphasise that markets have already bought into the story of a strong labour market and a rebounding housing market. NOK support is therefore likely to be fairly muted, even if we are right in our calls. We still deem the cooling Swedish house market as a headwind for the SEK. We see signs of a continued sluggish market over the summer”.
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