EUR/NOK seen at 9.00 in 12-month – Danske Bank

Analysts at Danske Bank now expect the cross to grind lower and test the key 9.00 handle within a year’s time frame.

Key Quotes

“As we expected, Norges Bank removed the rate cut probability embedded into the rate path at the June meeting and at the same time signalled that no imminent rate hike is forthcoming (also our call)”.

“The March-June weakening of the NOK should support growth and the inflationary outlook and, as such, the cooling housing market is the biggest domestic downside risk factor. However, we do not expect the current correction to have major real effects on the economy and, as such, domestics remain supportive for the NOK”.

“In addition, we have turned slightly more upbeat on the global outlook, which diminishes the external headwinds. We roll our 1M forecast to 9.30 but leave the rest of the profile unchanged at 9.30in 3M,9.10 in 6M and 9.00in 12M”.