The Norwegian krone weakening continues. In the view of economists at Nordea, the NOK will continue to face headwinds so long as the risk-off continues. However, eventually, the dust will settle and the krone should strengthen somewhat again.
If markets calm down, the latest movements in both EUR/NOK and USD/NOK could start to reverse
“The NOK could easily weaken further if things get worse. EUR/NOK up to 10.50 and USD/NOK up to 10.00 are levels which could be if equity markets continue down and bond yields up.”
“If markets calm down – potentially on the back of a peaking US CPI reading this week which is expected to fall to 8.1% YoY from 8.5% YoY – then the latest movements in both EUR/NOK and USD/NOK could start to reverse.”