EUR/NOK may break below 10.20 in the near-term – ING

Norway’s Norges Bank (NB) is due to deliver another hike. Economists at ING note that the EUR/NOK could break under 10.20, however, the krone’s upside potential is limited.

50 bps hike can offer some extra help to the krone

“We note that consensus is split between a 25 bps and a 50 bps move today: we expect a half point hike, as the September CPI upside surprise (6.9% year-on-year) may have overshadowed concerns about slowing economic activity. We think this can offer some extra help to the krone, which is already benefiting from oil’s good performance and the support from Norges Bank’s reduced daily FX purchases for November.” 

“EUR/NOK may break below 10.20 in the near-term, but we suspect that a worsening of risk sentiment conditions into year-end may limit further NOK appreciation.”

See – Norges Bank Preview: Forecasts from five major banks, back to 25 bps hikes