Credit Suisse strategists are still aiming for a 10.00 EUR/NOK by the end of Q3. They believe that rallies in the pair toward the Q1 highs of 10.48 will provide appealing entry points for new shorts.
“Domestic drivers, we believe, will be put on hold in the near future. External causes, we believe, will continue to be the driving force.”
“We continue to believe that a bullish NOK aim is justified, and we expect EUR/NOK to reach 10.00 by the end of Q3. Norges Bank has shown a greater willingness than other central banks to raise its rate path in the face of stronger evidence, and to look beyond bad data in the opposite direction. Because the bank does not have a quantitative easing program to wind down, its messaging is simpler than that of other central banks juggling multiple tools.”
“Even with recent difficulties, the country has had some success in managing COVID-19 locally. However, we believe that patience will be necessary for these variables to play out in a NOK-supporting manner in present market conditions, and that investor interest in NOK will be limited until the interest rate announcement on September 23.”
“Strategies aiming for a quick transition to our medium-term goal of 10.00 and lower will continue to meet challenges. However, we believe that rallies in EUR/NOK towards the Q1 highs around 10.48 would provide appealing entry chances for new shorts, as long as longer-term fundamentals remain intact.”/n
