EUR/NOK pair likely to remain around current levels, to ease in 2018 – Lloyds Bank

The EUR/NOK pair has traded in a well-defined range between 9.20 and 9.45 in recent months. The Norwegian central bank commented during its September policy meeting that it sees little change from its projections in June.

According to a Lloyds Bank research report, the key policy rate is likely to stay at 0.5 percent in the year ahead. This was underpinned by the recent data indicating much weaker-than-expected manufacturing figures and weak inflation pressures.

Meanwhile, house prices have continued to fall, dropping for the fifth straight month in September. The wider outlook is favorable to stronger activity and the central bank indicated that it could hike rates sooner than previously expected. The currency pair is expected to stay around current levels in the coming quarter, before easing in 2018.

“We forecast EUR/NOK at 8.75 at end-2018, levels it last reached in February this year”, added Lloyds Bank.

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