10 Jul 2015
EUR/NOK to edge higher near term – Danske Bank
FXStreet (Edinburgh) - Analysts at Danske Bank expect the cross to climb further, testing 8.90 in a month’s view.
Key Quotes
“EUR/NOK has spiked significantly higher in move resembling the Dec 14 sell-off”.
“Our short-term financial model explains only 60% of the move. This suggests that the remaining 40% is due to an increased liquidity premium”.
“Relative fundamentals, positioning and models suggest downside in EUR/NOK from the current level but we do not want to try to catch the falling NOK knife”.
“Markets underestimate the effect of the significantly weaker NOK on Norges
Bank’s (NB) monetary policy and we find market pricing of NB excessive”.
“We raise our EUR/NOK forecasts to 8.90 (from 8.65) in 1M, 8.70 (8.50) in 3M, 8.50 (8.25) in 6M and 8.40 in 12M”.
Key Quotes
“EUR/NOK has spiked significantly higher in move resembling the Dec 14 sell-off”.
“Our short-term financial model explains only 60% of the move. This suggests that the remaining 40% is due to an increased liquidity premium”.
“Relative fundamentals, positioning and models suggest downside in EUR/NOK from the current level but we do not want to try to catch the falling NOK knife”.
“Markets underestimate the effect of the significantly weaker NOK on Norges
Bank’s (NB) monetary policy and we find market pricing of NB excessive”.
“We raise our EUR/NOK forecasts to 8.90 (from 8.65) in 1M, 8.70 (8.50) in 3M, 8.50 (8.25) in 6M and 8.40 in 12M”.