EUR/NOK: Struggling to push below the 10.50 area – Rabobank

The NOK has been on the back foot for some time. On a 1 month view, the NOK is the worst performing G10 currency, losing over 11% vs. the USD, which is clearly related to the plunge in oil prices, according to analysts at Rabobank.

Key quotes

“In view of the sharp deterioration in economic conditions in Norway and the recently announced rate cuts from the Norges, the NOK is likely to remain soft until a turnaround in oil prices is in sight.” 

“The NOK is also likely a victim of thin liquidity, which implies that for many investors, the NOK may only be an attractive asset when risk appetite is at buoyant levels and demand for yield is particularly strong.” 

“We see risk that the NOK will remain depressed going forward, with EUR/NOK potentially struggling to push below the 10.50 area in the coming months.”