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- EUR/NOK set to break below the 9.50 support as Norges Bank delivers a hawkish hike – ING
EUR/NOK set to break below the 9.50 support as Norges Bank delivers a hawkish hike – ING
Norges Bank will once again hike its key rate by 25bp to then 0.75% today. The Norwegian krone should benefit from a hawkish hike, economists at ING report.
Norges Bank to hike and review rate path higher
“Norges Bank is highly likely to follow up on recent hawkish communication and hike interest rates by another 25bp. We expect the new projections to signal rate rises at each of the remaining quarters, with risks skewed towards more hikes rather than fewer.”
“We think there’s a non-negligible risk that the NB will raise the projected terminal rate to 2.25% or higher, and considering that the markets are pricing slightly less than 2% as a terminal rate at the moment, there is room for a hawkish surprise. All this suggests that the risks are skewed to the upside for NOK, although external drivers should once again prevail.”
“With the EU taking steps to reduce exposure to Russian gas, Norway’s energy exports are likely going to emerge as the major alternative: in our view, the current environment fully warrants a break below 9.50 in EUR/NOK, with the next key support at the 9.4130 2018 lows.”
See – Norges Bank Preview: Forecasts from seven major banks, hiking rates and plenty more to come
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