EUR/NOK has moved lower following Norway’s central bank surprise on the hawkish side. However, the pair is unlikely to break under the 11.00 level, in the view of economists at ING:

EUR/NOK will remain highly volatile

“NOK is the least liquid currency in G10 and was therefore very exposed to the tightening in global financial conditions, market volatility, and lately the turmoil in the banking sector. A hawkish Norges Bank cannot counter those characteristics of the Krone, but should European sentiment continue to stabilise, it can offer a breeding ground for recovery that can ultimately help Norges Bank limit imported inflation.” 

“Still, we think EUR/NOK will remain highly volatile, and a sustainable return below 11.00 will require a more substantial return of market confidence in the financial system: something that we may not see in the very near term.”