Scandinavian FX remain exposed to mixed central bank messages and Russia-related geopolitical risks –analysts at Credit Suisse target EUR/NOK at 10.70 and EUR/SEK at 11.30 by the end of Q4.

Norges Bank has surprised dovish, even compared to the Riksbank and its mixed message

“On 22 Sep, Norges Bank left the terminal rate estimate unchanged at around 3%, right as markets instead pushed yields higher in the rest of G10. This projected monetary policy divergence, especially vs an increasingly hawkish ECB, creates fresh EUR/NOK upside risk. We now target 10.70 and see the pair in a 10.00-10.90 range in Q4.”

“Markets are now expecting the ECB to beat the Riksbank to the punch by tightening at a faster pace, even with the latter expected to reach a higher terminal rate down the line. SEK will underperform further if the message stays mixed. We now target 11.30 in EUR/SEK.”