NOK stays poised for extra strength – Danske Bank

Kristoffer Lomholt, Senior Analyst at Danske Bank, keeps the bullish bias around the Norwegian Krone unchanged.

Key Quotes

“For Scandi FX markets, we emphasise that we do not see Friday’s change to the monetary policy regulation in Norway as a game changer, as the near-term potential for a steeper FRA curve is limited by Norges Bank’s relatively subdued inflation forecast”.

“On balance, it should lead to a moderately stronger NOK not least versus the SEK, as the relative Scandi stories become more pronounced. We are already long NOK/SEK spot and short EUR/NOK via a 3M bearish seagull that expires today. Overall, Friday’s announcement underpins the fundamental case for a stronger NOK that we have been flagging since December”.