EUR/NOK to hit 11 as krone could even weaken further towards year-end – Nordea

Norges Bank just announced that they will raise their NOK selling to 4.3bn from 3.5bn NOK per day. This change points toward an even weaker krone ahead, economists at Nordea report.

Norges Bank steps up the ante

“Norges Bank just announced that they will sell 4.3bn NOK/day in October from 3.5bn today. The higher NOK selling from Norges Bank combined with lower NOK purchases from oil companies and continued uncertainty in financial markets means that the NOK could weaken even further towards year-end, with EUR/NOK up to 11 and USD/NOK around 11.50.”

“For the NOK to fare better than we expect, we need risk sentiment to improve markedly in the coming months, which is unlikely given central bank's fight against inflation.”