Nordea seeks to spot NOK breakout after oil price fall
Nordea Markets continues to keep a close eye on the Norwegian currency in light of the ongoing sharp falls in oil prices.
The bank expects the pressure to remain on NOK, particularly in regards to falling prices for Brent oil – the benchmark price set for oil extracted from the North Sea.
“Brent oil prices have continued to drop, pressuring the NOK,” Nordea Markets said in a morning note to investors.
“This pressure comes via the impact from lower oil prices on the Norwegian economy and in extension on Norges Bank. EUR/NOK is unlikely to break materially lower barring signs of a stabilising oil prices or signs of a shift from Norges Bank (don’t bet on it).”
Earlier this week, Norges Bank governor Øystein Olsen warned that the central bank would have to revisit its projections for the Norwegian economy and inflation expectations for 2015, last set out in December, because of the sharp falls in oil prices globally.