Kristoffer Lomholt, Analyst at Danske Bank, sees NOK appreciating further in the second half of the year.
Key Quotes
“While the NOK from a medium- to long-term perspective is undervalued, the short-term outlook continues to be closely tied to global risk appetite both directly (via the EUR’s status as a preferred funding currency) and indirectly (via global growth expectations and oil prices)”.
“The latest rebound in the oil price has weighed on the cross and as the Fed now to a much larger extent seems to incorporate global growth concerns, we think the oil price (and thereby NOK) down-side tail risk has been reduced significantly”.
“We do, however, maintain the view that markets – and not least Norges Bank – will have to see clear evidence that the business cycle is turning before a more sustainable NOK appreciation trend can materialise. We expect this to be the story for H2. We now forecast EUR/NOK at 9.40 in 1M (from 9.70), 9.40 in 3M (9.70), 9.30 in 6M (9.40) and 9.00 in 12M (9.10)”.
