EUR/NOK outlook remains cautious – Danske Bank

Kristoffer Lomholt, Senior Analyst at Danske Bank, remains cautious on the prospect for the Norwegian Krone in the near term.

Key Quotes

“We maintain our near-term cautious view on the NOK as the global business cycle and commodities outlook does not favour the NOK even if Norges Bank is likely to turn ‘cautiously hawkish’ in June. On the other hand, we pencil in the EUR moving somewhat lower over the coming months as eurozone data weakens and European equities no longer attract unhedged equity flows. This should drag the cross lower”.

“The Norwegian normalisation story, valuation and real rates remain clear NOK positives but the positive effects will likely be that of an H2 17/H1 18 story”.

“We lift our EUR/NOK forecasts to 9.40 in 1M (from 9.30) but leave the rest of the profile unchanged”.