EUR/NOK still a sell on strength – Danske Bank

Arne Rasmussen, Chief Analyst at Danske Bank, keeps the constructive view for the Norwegian Krone in the next months.

Key Quotes

“Yesterday’s NOK session was dominated by the July inflation print and oil swings. While there will still be another CPI release (11 September) ahead of the next Norges Bank meeting (21 September), yesterday’s release confirmed that inflation will likely be a considerable positive factor for the next”.

“It is still too early to estimate the new rate path – especially as we will get other crucial data releases over the coming month – yet it is important to point out that the stronger NOK, at this stage, will actually cancel out the rate path impact from higher inflation. As such, we think this confirms our fundamental predisposition to await better entry levels before re-selling EUR/NOK”.

“The coming week is empty in terms of important domestic data releases. Hence, external developments (e.g. oil price) should set the tone for the NOK in the coming sessions. The next pivotal domestic releases will be the oil investment survey and Q2 GDP both due on 24 August”.