The Norwegian krone has sold off mirroring the general move lower in commodity currencies. Economists at Danske Bank pencil in a rise in EUR/NOK over the coming three months.

Timing NOK rebound is tricky

“We still pencil in EUR/NOK heading higher over the coming 3-6M driven by a slowdown in growth, a European recession, volatile asset markets and spread tightening in the short-end of rates curves.”

“For 2023, we still pencil in a NOK rebound – but timing is tricky. Until we see global central banks and not least the Fed signal a shift of policy towards a more dovish direction we prefer to play the weak leg in NOK.” 

We maintain a ‘reverse V-profile’ and forecast EUR/NOK at 10.60 in 1M (from 10.40), 10.70 in 3M (from 10.60), 10.30 in 6M (from 10.20) and 9.80 in 12M (unchanged).”