Norwegian Krone: Further gains seen versus Euro - Rabobank

Rabobank's Senior FX Strategist Jane Foley highlights that the Norwegian Krone (NOK) is the strongest G10 currency across multiple horizons, supported by Oil prices, above-target inflation and a hawkish Norges Bank. Norway’s role as Europe’s largest energy exporter and resilient domestic demand underpin NOK. Foley expects EUR/NOK to drift lower and has cut its 3‑month target to 10.80, with a 12‑month view near 10.50.

NOK strength backed by policy and energy

"We continue to see scope for a gentle move lower in EUR/NOK towards 10.50 on a 12-month view."

"Currently market rates imply little risk of a rate hike next month, though these odds will be impacted by the release of August CPI inflation data on September 10."

"Given speculation that the Iran war could drag on and in view of the potential for the Norges Bank to hike rates again, we continue to favour buying NOK vs. the EUR and have lowered our 3-month target to 10.80 from 10.90."

"The NOK remains the best performing G10 currency in the year to date, half year to date, over the past month and over the last 5 trading sessions, though EUR/NOK remains above its spring lows."

"Expectations that further policy is in the pipeline and Norway’s position as Europe’s biggest energy exporter are currency supportive factors."