The Norwegian krone has benefitted from a supportive global risk sentiment throughout the week. In the week ahead, economists at ING think the NOK rally may pause.
Time for a breather in EUR/NOK
“The krone is already scoring as quite expensive against both the EUR and the USD according to our short-term fair value model.”
“While some other overvalued currencies will face a catalyst for a potential correction next week (like CAD with the BoC meeting), for NOK to give up gains we would likely need to see a deterioration in risk sentiment and/or a drop in oil prices.”
“October unemployment data out of Norway should have limited impact – we expect EUR/NOK to gravitate around 9.70 in the week ahead.”