EUR/NOK to stay above 10 for several more weeks despite Norges Bank hike – ING

Norges Bank is set to hike its interest rate by 50 bps to 2.25%. EUR/NOK has rallied since the start of September and the central bank’s decision is unlikely to reverse the upmove, economists at ING report.

Norges Bank hike unlikely to turn the NOK around

“Norges Bank is widely expected to deliver another 50 bps rate hike today. With core inflation having continued to press higher, we expect NB to signal more tightening ahead, and we currently forecast another 50 bps rate hike in November. This may not have many implications for the krone’s short-term outlook, as external drivers should remain dominant.”

“We continue to see scope for a recovery in NOK around the turn of the year, but near-term downside risks remain significant, and a return to sub-10.00 EUR/NOK levels may not materialise for several more weeks.”

See – Norges Bank Preview: Forecasts from five major banks, set for another 50 bps