EUR/NOK will test the 10.00 level – Nordea

The EUR/NOK pair is set to  test the 10.00 level but a further strengthening of the NOK will require a lift in oil prices in the opinion of economists at Nordea.  EUR/NOK is trading at 10.026 right now. 

Key quotes

“NOK is benefitting from lower Covid-19 infection rates through a returning demand for risky assets. A test of the 10.00-level in EUR/NOK looks likely within the coming week. However, significant strengthening of NOK beyond the 9.90-9.95-level will probably require a more fundamental lift in oil prices, which so far remains to be seen despite better mood in equities.”

“Norges Bank has no tradition of rocking the boat due to short-term volatility in markets. However, the virus reaction in financial markets would still affect Norges Bank’s rate path if they were to make one today, as changes in foreign rates, NOK and oil prices are treated quite mechanically by Norges Bank when they construct the rate path.”