Ekonomické zprávy
04.11.2021

NOK faces moderate downside risks before the December meeting - ING

FX Strategists at ING discuss the prospects of NOK, given the Norges Bank's signal of a December rate hike and rising oil prices.

"The Norges Bank statement was fully in line with expectations, giving markets no reasons to question their current Norges Bank rate expectations. NOK, which we argue is modestly overvalued (by around 2%) in the short term, is still running some risk of correcting lower before the 16 December NB meeting, in our view. The trigger for a correction is, however, likely to come from some deterioration in external factors (risk sentiment or oil prices) - the domestic picture remains robust and the NB appears to be quite credibly delivering on its tightening plans."

"With not much more room for hawkish re-pricing to further lift NOK, the hawkish NB stance should play out as a currency-positive only by raising NOK’s carry attractiveness, which should only offer support in the longer run. We continue to target 9.70 in EUR/NOK for the end of this quarter."

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