In Norway, mainland Gross Domestic Product data surprised on the upside. However, the Krone may not be able to benefit from the strong figures as the EURNOK’s path relies on calm markets, economists at ING report.

Strong domestic story may not matter

“Norwegian GDP data for the third quarter surprised on the upside, showing a rather strong 1.5% quarter-on-quarter growth. This is a testament to how the domestic story should remain largely supportive of NOK, also into the new year. Whether this will ultimately feed into a stronger Krone is another question, and mostly depends on whether markets will prove calm enough to allow fundamentals to play a role.”

“We really think volatility will be the name of the game for EURNOK next year, even though our base-case scenario is downward-sloping in 2023.” 

“In the short run, a return to 10.60+ is a tangible possibility.”