A stronger NOK is expected in the next months – Danske Bank

Senior Analyst at Danske Bank Kristoffer Lomholt sees the Norwegian Krone gathering extra pace in the medium to longer run.

Key Quotes

“Going into year-end, where seasonality tends to be a NOK negative (see overleaf), the development in the oil price will remain a key driver. We still do not think OPEC will reach a meaningful agreement on the 30 November meeting but markets have in our view close-to fully priced this outlook in. As a result, we see the USD as a key factor and with the outlook of the greenback moving higher in the next months, we think this would keep in check the positive oil impact from a cold winter in the US”.

“The Trump-presidency has added a risk scenario to the NOK (see overleaf) but for 2017 we still see a fundamental story supporting a lower EUR/NOK on growth, real rate differentials and a higher oil price. We now forecast EUR/NOK at 9.20 in 1M (previously 9.10) but leave unchanged our 3M, 6M and 12M forecasts of 9.20, 9.00 and 8.80, respectively”.