NOK/SEK appears to have bottomed – Danske Bank

Senior Analyst at Danske Bank Pernille Henneberg sees dips in the Nordic cross as buying opportunities.

Key Quotes

“A reversal of the last days’ NOK/SEK selling was the primary factor for sending EUR/NOK lower in the early session despite the coinciding drop in NOK rates”.

“In afternoon trading, the oil inventory data has triggered further NOK buying, meaning NOK losses for the week have now almost been erased”.

“Going forward, we still think the external environment for selling EUR/NOK is not right given the current level whereas the outlook for inflation disappointing in Sweden also limits the EUR/SEK downside potential”.

“On balance, this favours tactically buying NOK/SEK, which also technically looks to have formed a bottom. Based on the latest flow data from Norges Bank, our proxy for overall speculative NOK positioning would suggest that investor accounts are now square. This fits well with our overall investor impression and our own preference ahead of the month end”.