EUR/NOK: More downside going into Norges Bank’s rate meeting – Nordea

EUR/NOK has continued falling from 12.00 to below 11.50 now. Norges Bank’s rate decision next week will be the key factor for NOK’s path in the short-term, economists at Nordea report.

EUR/NOK will again move higher during the summer and trade around the 12.00 level

Markets now see 30% probability for a 50 bps rate hike next week and price a key rate around 4% by September. Norges Bank needs to be more hawkish than markets currently expect and hike by 50 bps next week for the NOK strengthening to continue. Thus, we could see somewhat more downside for EUR/NOK going into Norges Bank’s rate meeting. 

However, for now, we hold our view that EUR/NOK will again move higher during the summer and trade around the 12.00 level.