In the view of economists at ING, Norges Bank will this week reiterate its intention to hike rates in December – they expect that to be followed by a further three rate rises next year. The krone has already seen the benefits of the hawkish re-pricing, so EUR/NOK has limited further downside potential in 4Q.

NOK already embedding hawkish expectations

“We expect a December rate hike and most likely three further increases through 2022.”

“We expect this week’s Norges Bank meeting to generate a quite contained market impact, as we should merely see a confirmation that interest rates will be raised again in December, a prospect that is already very much priced in by markets.”

“We think that more benefits for NOK stemming from the Norges Bank's tightening cycle should come through a carry advantage (which should play out in the longer run) rather than from the central bank surprising on the hawkish side.”

“We see only limited downside room for EUR/NOK in 4Q, and we expect 9.70 as a year-end value.”