NOK has started 2018 on a strong footing – Danske Bank

Analysts at Danske Bank note that the NOK has started 2018 on a strong footing as yesterdays’ stronger-than expected manufacturing PMI out of Norway attracted some of the NOK buyers that we know left the market at the end of last year.

Key Quotes

“Indeed, 2017 proved yet another year where the NOK suffered going into year-end. Specifically, EUR/NOK rose almost 4% in November and December 2017, which compares to a historical average since 2001 of 2%. With year-end headwinds behind us, it’s worth noting that over the last three years, NOK under-performance going into year-end has been followed by January over-performance in the magnitude of c. 2%. We think this could well be the case this year and we remain long NOK via a short EUR/NOK options position and a long NOK/SEK spot position.”