14 Jul 2015
Stronger NOK could drag EUR/NOK towards 8.30 – Goldman Sachs
FXStreet (Edinburgh) - Analysts at Goldman Sachs expects the Norwegian krone to pick up pace and take EUR/NOK to 8.30 in a 12-month horizon.
Key Quotes
“We continue to expect the NOK to strengthen against the EUR”.
“With a strong external balance, the NOK is fundamentally supported. In the medium to long term, with a closed output gap, strong credit growth and rising house prices, Norges Bank will likely hike rates earlier than the ECB”.
“The near-term risk is further easing from Norges Bank in response to the drop in oil prices over the last year; however, this possibility is largely discounted by the market”.
“We maintain our EUR/NOK forecast at 8.50, 8.40 and 8.30 in 3, 6 and 12 months, which we adopted on February 25”.
“The NOK looks undervalued vs. the Euro at current levels, according to our GSDEER valuation of 8.28, reflecting Norway's terms-of-trade gains. However, because Norway keeps the bulk of its oil revenues offshore, the Kroner is unlikely to erode this undervaluation substantially”.
Key Quotes
“We continue to expect the NOK to strengthen against the EUR”.
“With a strong external balance, the NOK is fundamentally supported. In the medium to long term, with a closed output gap, strong credit growth and rising house prices, Norges Bank will likely hike rates earlier than the ECB”.
“The near-term risk is further easing from Norges Bank in response to the drop in oil prices over the last year; however, this possibility is largely discounted by the market”.
“We maintain our EUR/NOK forecast at 8.50, 8.40 and 8.30 in 3, 6 and 12 months, which we adopted on February 25”.
“The NOK looks undervalued vs. the Euro at current levels, according to our GSDEER valuation of 8.28, reflecting Norway's terms-of-trade gains. However, because Norway keeps the bulk of its oil revenues offshore, the Kroner is unlikely to erode this undervaluation substantially”.