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NOK could gather traction in H2 – Danske Bank

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 21, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    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)”.
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