EUR/NOK: Slightly weaker krone ahead – Nordea

EUR/NOK now trades just below 10.00 and USD/NOK is at 8.60. Economists at Nordea believe both pairs have reached the bottom for now.

Reduction of stimulus from the Fed towards year-end will lead to a stronger USD and weaker NOK

“US Nonfarm Payrolls published on Friday is this week’s most important figure. A job report in the range of 250.000-500.000 new jobs is probably sufficient for the Fed to start tapering in November. A good job report will likely result in higher US rates and in turn a weaker stock market. This could lead to a stronger USD and a weaker NOK; the USD usually strengthens during risk-off while the NOK weakens.”

“From a technical perspective, the downside for EUR/NOK is very limited. EUR/NOK has traded only briefly below 10.00 this year with 9.90 as the lowest point this year. This should be a very firm line in the sand for the cross.”