20 Jun 2014
EUR/NOK upside limited – Danske Bank
FXStreet (Edinburgh) - Senior Analyst Sverre Holbek at Danske Bank sees the upside in EUR/NOK as limited, despite the recent decision by the Norges Bank.
Key Quotes
“Yesterday we saw the Norwegian krone under significant pressure after Norges Bank made a bigger-than-expected revision to the rate path”.
“But given that Norwegian rates are now trading well below the new Norges Bank rate path and as we expect no rate cut in Norway in the second half of 2014, we believe that the upside potential for EUR/NOK is very limited from the current spot-level and we still expect the cross to edge lower over the next 12 months”.
“Remember, the Norwegian krone is still supported by a healthy carry”.
Key Quotes
“Yesterday we saw the Norwegian krone under significant pressure after Norges Bank made a bigger-than-expected revision to the rate path”.
“But given that Norwegian rates are now trading well below the new Norges Bank rate path and as we expect no rate cut in Norway in the second half of 2014, we believe that the upside potential for EUR/NOK is very limited from the current spot-level and we still expect the cross to edge lower over the next 12 months”.
“Remember, the Norwegian krone is still supported by a healthy carry”.