NOK seen stronger in the long run – Danske Bank

Senior Analyst at Danske Bank Morten Helt expects NOK to gather traction in the longer term.

Key Quotes

“Yesterday saw a significant strengthening of the NOK following the central bank meeting (rate kept unchanged as expected) and a stronger than expected Q1 GDP release”.

“On balance we think the drop is slightly overdone given the amount of new information received. Therefore overall today’s decision does not change our view on the NOK: we expect EUR/NOK to trade around current levels in the coming month with the very short term risks skewed to the upside”.

“We maintain the view that fundamentals limit the medium term downside potential and that we have to see a growth pick-up end-2016-17, together with a re-pricing of NOK rates, to trigger a sustainable move lower”.