Antje Praefcke, FX Analyst at Commerzbank, believes that Norges Bank is unlikely to take a dovish approach. Thus, the Norwegian Krone is undervalued at current levels.

Assuming that NB will immediately take a dovish approach is wrong

“Norges Bank was one of the first central banks to start the rate hike cycle. This is why, similar to the Fed, it might be one the first ones to end and reverse it. However, to assume that it will immediately take a dovish approach is wrong in my opinion, as the data does not suggest that.”

“I stick to my view that the market is trading NOK at too weak levels.”