3 Apr 2015
EUR/NOK at 8.00 end of 2016 – BAML
FXStreet (Edinburgh) - In the opinion of analysts at BAML, the cross could be headed towards the 8.00 key area by end of 2016.
Key Quotes
“We maintain our EUR/NOK forecasts, targeting EUR/NOK at 8.30 by the end of the year and 8.00 by end-2016”.
“With oil prices playing such a large role in the outlook for Norway and for NOK, there is still significant uncertainty around the outlook”.
“Our commodities team does not expect a V-shaped recovery in oil prices and the effects of lower oil prices will gradually become more evident in the data, making the case for easing stronger”.
“We believe Norges will cut rates again in May or June and maintain an easing bias, and indeed the Bank’s own rate path indicates as much”.
“The level of NOK will continue to play a role in the Bank’s reaction function, and significant strengthening of NOK increases the chances of easing, suggesting that a rapid appreciation in the currency will be met with resistance from the Central Bank”.
“In the medium term, ECB QE will be beneficial for Norway, as well as pushing EUR lower. We also do not exclude a fiscal response to support the non-oil economy, as well as a modest recovery in oil prices, in all suggesting a more positive outlook for 2H15”.
Key Quotes
“We maintain our EUR/NOK forecasts, targeting EUR/NOK at 8.30 by the end of the year and 8.00 by end-2016”.
“With oil prices playing such a large role in the outlook for Norway and for NOK, there is still significant uncertainty around the outlook”.
“Our commodities team does not expect a V-shaped recovery in oil prices and the effects of lower oil prices will gradually become more evident in the data, making the case for easing stronger”.
“We believe Norges will cut rates again in May or June and maintain an easing bias, and indeed the Bank’s own rate path indicates as much”.
“The level of NOK will continue to play a role in the Bank’s reaction function, and significant strengthening of NOK increases the chances of easing, suggesting that a rapid appreciation in the currency will be met with resistance from the Central Bank”.
“In the medium term, ECB QE will be beneficial for Norway, as well as pushing EUR lower. We also do not exclude a fiscal response to support the non-oil economy, as well as a modest recovery in oil prices, in all suggesting a more positive outlook for 2H15”.