EUR/NOK poised for further rangebound – Danske Bank

Kristoffer Lomholt, Senior Analyst at Danske Bank, sees the cross navigating between 8.80 and 9.00 in the next months.

Key Quotes

“The latest move lower in EUR/NOK seems slightly overdone according to the coinciding moves in near-term FX drivers. As a result we find it likely that the cross will take a ‘breather’ and settle in the 8.80-9.00 range over the coming months. Longer-term normalising growth, real rate spreads, oil markets and valuation forces should act as a drag on the cross, but we fear markets are too optimistic about the medium- to longterm outlook for the business cycle, which should limit the downside potential in H2 17”.

“We shift lower our EUR/NOK profile, forecasting the cross at 8.90 in 1M (from 9.00.), 8.80 in 3M (8.90), 8.70 in 6M (8.80) and 8.70 in 12M (unchanged)”.