EUR/NOK seen at 9.10 in 12-month – Danske Bank

Senior Analyst at Danske Bank Kristoffer Lomholt believes the cross could test 9.10 within a year’s view.

Key Quotes

“The NOK has started 2018 strongly, as Norges Bank and foreign investors return to the market. Despite the latest appreciation, we still see a fundamentally compelling case for the NOK to move even higher in 2018. Not least, higher and more broad-based mainland growth mean the economy can now cope with the undervalued NOK moving closer to long-term ‘fair value’. Also, we think the positive terms of trade shock stemming from higher oil prices in 2017 is not yet reflected in the NOK. Finally, positioning and relative rates (Norges Bank and Nibor fixings) are also NOK positives in the quarters ahead”.

“We roll the front-end of our forecast profile to 9.50 in 1M (from 9.60), with 9.40 in 3M, 9.20 in 6M and 9.10 in 12M unchanged”.