EUR/NOK could grind lower near term – Danske Bank

Analyst at Danske Bank Mathias Mogensen expects the cross to slip to lower in the next sessions following a better sentiment around NOK.

Key Quotes

“In terms of EUR/NOK, we think the very short-term risks (coming days) remain skewed to the downside in light of a very NOK-supportive environment of Fed repricing, a weaker USD, higher oil prices and economic data releases suggesting an improved growth outlook in Norway”.

“However, we still maintain our long-held view that the fundamental backdrop for a significant NOK appreciation is still not present”.

“Indeed, yesterday’s Regional Network Survey (RNS) still points to weak private sector growth in Norway in H2 16. As a result we think the RNS supports our call of Norges Bank keeping rates unchanged in June while signalling a rate cut in September (markets currently price in less than a 50% probability of a September cut)”.