NOK faces downside risks – Danske Bank
Senior Analyst at Danske Bank Sverre Holbek exposed his views on the Norwegian krone and the current scenario in crude oil prices.
Key Quotes
“The higher oil price has supported the regular G10 beneficiaries in the likes of the CAD and NOK”.
“In terms of the Norwegian currency, yesterday’s price action reflects the challenge facing Norges Bank in acting as the first line of defence against the oil-induced growth slowdown. Intraday the NOK followed the oil price higher even though the important quarterly oil investment survey showed that the past months’ higher oil price has not stabilised investments plans (i.e. growth outlook remains weak)”.
“Given the outlook for short-term USD strength, no strong global cyclical signals and uncertainty creeping in the final month ahead of the UK/EU referendum we think the NOK balance of risk increasingly has become skewed to the downside”.
Source:: FX Street
