EURNOK has been slipping from levels of 9.3144, to below DMAs, to currently trade at 9.2787. For now, the bumpy rallies are foreseen as fresh shorting opportunities.

The oil investment survey on the weak side and we expect to see investment plans revised even lower going forward. LFS unemployment edging higher to 4.8%, with Norges Bank expecting 4.6% for 2016. Consumer confidence rising to the highest levels since January 2013.

While foreign banks have scaled back on long NOK positions added after the surprisingly high CPI data from July, last week saw foreign banks add NOK.

The 3M interest rate differential was stable last week. NOK 2017 FRAs rose 4bps last week, while similar EUR FRAs were up 1-2bps.

Driving forces:

The EURNOK forecasts are 9.20, 8.9 and 8.70 in 1, 3 and 12 months.

We could still foresee the NOK as weaker than implied by fundamentals. Higher oil prices should support the NOK going forward.

NOK has failed to catch up with higher interest rate differentials, and we see Norges Bank having come to the end of the easing cycle.

Norwegian importers are advised to hedge using flexible forwards, while exporters are advised to choose 3m forwards.