EUR/NOK seen lower medium term – Danske Bank

Analyst at Danske Bank Kristoffer Lomholt expects the cross to head lower towards the second half of the year.

Key Quotes

“Fundamentally, the economic recovery in Norway still strongly depend on a weak currency, lower wage growth and the growth of important trading partners (e.g. Euro Area and UK)”.

“With the current outlook we therefore still expect fundamentals and relative rates to limit the EUR/NOKdownside potential in the coming 6M. Also ‘Brexit’-fears will, in our view, be a positive for the cross”.

“In H2, we expect an improved growth outlook both in Norway and globally, a gradually higher oil price and a corresponding reduction in the NOK risk premium to send the cross lower towards 9.00”.