6 May 2015
EUR/NOK targets 8.00 by end of 2016 – BAML
FXStreet (Edinburgh) - Analyst at BAML Myria Kyriacou sees the cross heading towards the 8.00 handle by the end of next year.
Key Quotes
“We maintain our EUR/NOK forecasts, targeting 8.30 by end-2015 and 8.00 at end-2016, but note that there is increased uncertainty, particularly at the front end of the path”.
“The recovery in oil removes some of the urgency for the Norges Bank to act immediately”.
“Conversely, NOK strength increases the possibility of easing, as does the latest Labor Force Survey unemployment data which showed increasing weakness in the labour market”.
“We believe Norges will cut rates again in May or June, though a May cut is a close call, and we maintain a preference for June”.
“In any event we expect a continued easing bias. However if the relative resilience in data continues and oil stabilises we may see expectations of more than one further rate cut this year gradually priced out. In the medium term, ECB QE will be beneficial for Norway, as well as pushing EUR lower”.
Key Quotes
“We maintain our EUR/NOK forecasts, targeting 8.30 by end-2015 and 8.00 at end-2016, but note that there is increased uncertainty, particularly at the front end of the path”.
“The recovery in oil removes some of the urgency for the Norges Bank to act immediately”.
“Conversely, NOK strength increases the possibility of easing, as does the latest Labor Force Survey unemployment data which showed increasing weakness in the labour market”.
“We believe Norges will cut rates again in May or June, though a May cut is a close call, and we maintain a preference for June”.
“In any event we expect a continued easing bias. However if the relative resilience in data continues and oil stabilises we may see expectations of more than one further rate cut this year gradually priced out. In the medium term, ECB QE will be beneficial for Norway, as well as pushing EUR lower”.