EUR/NOK presently trades round 10.35, after reaching a brand new post-corona low of 10.15 final Monday. It’s going to take the next price unfold towards G10 currencies (USD) and better oil costs for the pair to proceed down. This can take a while, so anticipate EUR/NOK about sideways within the near-term. However the cross may attain 10.00 earlier than the summer season, economists at Nordea transient.
“In terms of spot costs, Brent round $65/bl might be the place we’ll commerce within the close to time period – with extra upside longer out. For NOK, this implies there’s most likely restricted upside from oil within the near-term. With oil costs at $65/bl., EUR/NOK ought to have come down in the direction of 10.00.”
“What occurs to US charges issues for NOK. The final time NOK and oil disconnected was throughout the interval 2017 to mid-2019. We see Norwegian 2Y swap rates on the prime in G10 however we most likely want an excellent increased price unfold to compensate traders utilizing NOK as a protracted forex in carry trades. So what Norges Financial institution does shall be necessary for NOK forward.”
“ We imagine the Norges Financial institution will develop into much more hawkish in March and that they’ll sign a primary price hike earlier than the top of this yr. Such alerts from Norges Financial institution will give extra assist to NOK down the highway.”