EUR/NOK: Already cautious NB & low oil price limit NOK downside – ING

Petr Krpata, Research Analyst at ING is looking for EUR/NOK to return into the 9.30-9.40 trading range in coming weeks. 

Key Quotes

“With activity data and forward looking indicator showing signs of improvement and the last NB interest rate profile already pencilling in a 10bp cut in 3Q17, we don’t expect the June NB meeting to deliver a dovish surprise.”

“The recent decline in the oil price will keep the NB cautious (meaning that rate hikes are not on the table), but with the economy already adjusting to the lower oil price world and the capacity utilization of the Norwegian economy increasing, the outlook is no longer as dim as was the case previously.”

“We see largely limited downside to oil prices from here, suggesting a lack of a downside pressure on the undervalued NOK.”