The Norwegian krone has been able to retrace the losses seen in early summer and is now trading under the 10 level. Economists at Commerzbank expect the EUR/NOK to move downward if the Norges Bank hikes rates substantially next week.

NOK strength and electricity shortage?

“If we see increasing indications of Norges Bank hiking rates again notably next week, while possibly also raising the rate path NOK might be able to regain further ground against the euro.”

“There is no risk of an imminent electricity crisis in Great Britain or other parts of Europe as long as there is no risk of power shortages in Norway. However, it does illustrate that we might see some side shows in the European energy crisis if the water levels in the Norwegian water reservoirs do not improve.”