FXStreet (Edinburgh) – Flemming Nielsen, Senior Analyst at Danske Bank, sees the cross inching higher in the medium term.
Key Quotes
“In the Scandi FX markets, EUR/NOK moved sharply higher yesterday on the back of the continued move lower in the oil price”.
“According to our short-term financial models EUR/NOK remains undervalued – with a fair value estimate of 8.63”.
“The fair value estimate for EUR/NOK has risen 1.1% this week of which roughly 0.4pp can be attributed to the lower oil price. The remaining 0.7pp can primarily be attributed to relative rates in the long end of the curve”.
“We expect EUR/NOK to edge higher ahead of the monetary policy meeting in Norges Bank on 18 June when we expect the bank to cut rates by 25bp. This is not fully priced in the market”.
(Market News Provided by FXstreet)