Published: 2/19/2018 3:57:00 AM
“The NOK has suffered from the recent sell-off in risky assets. Meanwhile, looking ahead we still see a solid fundamental case for why the NOK should strengthen”.
“First, higher and broader-based Norwegian growth allows for the undervalued NOK to move higher”.
“Secondly, speculative positioning in our view remains a NOK positive”.
“Third, the significantly positive terms-of-trade shock that Norway experienced with rising oil prices last year is not yet reflected in the currency”.
“Fourth, relative rates will in our view become a EUR/NOK negative this year via both NB and tighter global USD liquidity”.
“Finally, the global growth picture remains supportive. We leave our forecast profile unchanged at 9.50 in 1M, 9.40 in 3M, 9.20 in 6M and 9.10 in 12M”.
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