EUR/NOK seen grinding lower in the longer run – Danske Bank

Chief Analyst at Danske Bank Allan von Mehren expects NOK to gather traction in the longer term.

Key Quotes

“In the Scandies, EUR/NOK fell further on Friday although the speed slowed”.

“We argued that Norges Bank would increase NOK liquidity over the coming months and/or cut the sight deposit rate in September. As such, 3-month NIBOR rates should come off, reducing the support for the NOK”.

“Near term, we acknowledge the light positioning in NOK from the speculative community, which implies that risks remain to the downside in EUR/NOK in the very short term. However, we would look for a move higher in EUR/NOK when the current momentum fades”.