26 Aug 2015
NOK under pressure via Norges Bank and oil – Danske Bank
FXStreet (Edinburgh) - Signe Roed-Frederiksen, Senior Analyst at Danske Bank, assessed the potential scenario for the Norwegian krone.
Key Quotes
“The NOK’s sensitivity to oil price changes is very high and data on US oil inventories could be directional for EUR/NOK this afternoon as it was last week”.
“Fundamentally, we expect Norges Bank to cut rates by 25bp in September as a final insurance cut against the collapse in the oil price”.
“The market is pricing in 20bp for September and around 45bp before June 2016 in terms of rate cuts”.
“However, the market may up its expectations ahead of the September meeting pricing in a full 25bp rate cut for the meeting and 50bp in total over the coming 12 months”.
“This coupled with the collapse in the oil price may put further pressure on the NOK short term, both against the EUR and USD”.
Key Quotes
“The NOK’s sensitivity to oil price changes is very high and data on US oil inventories could be directional for EUR/NOK this afternoon as it was last week”.
“Fundamentally, we expect Norges Bank to cut rates by 25bp in September as a final insurance cut against the collapse in the oil price”.
“The market is pricing in 20bp for September and around 45bp before June 2016 in terms of rate cuts”.
“However, the market may up its expectations ahead of the September meeting pricing in a full 25bp rate cut for the meeting and 50bp in total over the coming 12 months”.
“This coupled with the collapse in the oil price may put further pressure on the NOK short term, both against the EUR and USD”.