EUR/NOK Outlook: Bearish, as the rate is below its recent average and influenced by the stronger US dollar affecting the euro.
Key drivers:
• Rate gap: The European Central Bank has kept a cautious monetary policy, while Norges Bank's current rate holds steady, benefiting the krone.
• Risk/commodities: Oil prices are currently well above their average, providing support for the Norwegian economy and the krone.
• One macro factor: The Eurozone's modest growth is tempered by concerns over competitiveness due to a potentially stronger euro, impacting the euro's strength.
Range: EUR/NOK is likely to drift within its recent range as it remains several percentage points below the average.
What could change it:
• Upside risk: A significant rebound in eurozone retail sales data could boost the euro.
• Downside risk: Any escalation in geopolitical tensions impacting energy supplies may weaken the euro further.