NOK to remain weak until the summer – Nordea

Economists at Nordea still see a weak Norwegian Krone (NOK) until the summer.

Lower rate differential against the Euro a key factor behind the weak NOK

“We expect the NOK to remain weak until the summer – with our view for EUR/NOK around 11.30 in 3M and 11.00 by year-end 2023.” 

“Norges Bank’s NOK sales, low interest rate differentials and a high likelihood for risk-off all point to a NOK that will remain to be weak.”

“We expect that Norges Bank will gradually reduce their NOK sales going forward. That should support the NOK, in isolation. Yet, the NOK will likely remain weak because interest rate differentials will likely remain low for the time to come.”

“A lower rate differential against the Euro has been a key factor behind the weak NOK lately – and this is unlikely to change soon.”