The Norwegian Krone appears stable following recent inflation figures and balanced positioning, noted Mikael Milhoj, Senior Analyst at Danske Bank.
“Friday’s lower-than-expected inflation data in Norway alongside a drop in oil below USD70/bbl triggered a move higher in EUR/NOK. That said, the inflation details were much better than the prints at first would suggest, which also means the impact on monetary policy should be modest. Indeed, core inflation is now spot on Norges Bank’s forecast”.
“In our view, aggregate NOK positioning is more balanced than market perception seems to be. In our view, the remarkably stable EUR/NOK price action lately supports the notion of fairly balanced positioning. This week, the key data release is tomorrow’s Q3 GDP data where we pencil in a disappointment driven by temporary factors”.