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EUR/NOK seen at 8.80 in 12-month – Danske Bank

FXStreet (Edinburgh) - Analyst Kristoffer Lomholt at Danske Bank, sees the cross heading towards the 8.80 area in a year’s time.

Key Quotes

“While we expected the NOK to weaken on a NB September rate cut, improved risk sentiment, a higher oil price and a more expansionary fiscal budget than what we had expected has triggered a EUR/NOK fall”.

“We do, however, maintain the view that risks are skewed to the upside as we approach year-end, when NOK liquidity tends to worsen”.

“The NOK remains very cheap which together with a reversal of bearish speculative NOK-bets should become a NOK positive when the business cycle turns”.

“We leave our 6-12M forecasts unchanged at 9.25 in 6M and 8.80 in 12M but lower our 1M and 3M forecast to 9.30 (both from 9.40)”.

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