EUR/NOK: Too early for the more secular bullish krone trend to commence – Danske Bank

EUR/NOK has moved sharply higher over the last month. Economists at Danske Bank pencil in a further rise in EUR/NOK over the coming 3-6M on rising global recession risks but forecast a secular weakening trend amid the outlook for elevated inflation and commodity prices in the years ahead.

Still too soon to prepare for secular downswing

“We think it is too early for the more secular bullish NOK trend to commence and we generally see risks skewed to the topside post a temporary rebound.

“We forecast EUR/NOK at 10.20 in 1M (from 9.50), 10.50 in 3M (from 9.80), 10.40 in 6M (10.00) and 10.00 in 12M (9.80).”

“ A widespread global recession and a sharp sell-off in risk could send EUR/NOK substantially above our projection. On the other hand, a persistent move higher in oil and natural gas prices would send EUR/NOK lower.”