EUR/NOK on course towards 8.85 - Natixis

Research Team at Natixis, suggests that the Norges Bank is meeting this week and is likely to maintain the status quo despite the weak growth.

Key Quotes

“Currently, the Norwegian krone is significantly undervalued, but its nominal effective exchange rate has recovered since the start of the year, mainly in reaction to the upturn in crude oil prices. The krone has outperformed significantly the Swedish krona for several months.

Furthermore, Norges Bank has to contend with the fact inflation was high at 3.6% year-on-year in September. Even so, the firmness displayed by crude oil prices should continue to bolster the krone in the short term. In particular, we see the EUR/NOK pulling back towards 8.85.”