EUR/NOK: Room for Krone weakness to reverse further – MUFG

The Norwegian Krone staged a strong rebound over the past month. Economists at MUFG Bank analyze NOK's outlook.

Norges Bank will remain sensitive to Krone's weakness

The Krone has derived support recently from the easing of investor concerns over the risk of a hard landing for the global economy. 

Recent optimism over a softer landing for the global economy has helped to lift commodity prices including Oil that has been encouraging a stronger NOK.

In addition, Krone has derived support recently from the Norges Bank’s decision to tighten policy more in response to upside inflation risks. With core inflation uncomfortably high, the Norges Bank will remain sensitive to NOK weakness.

EUR/NOK – Q3 2023 11.10 Q4 2023 11.00 Q1 2024 10.90 Q2 2024 10.80