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Goldman Sachs Notch EUR/NOK Forecasts Higher

NORWAY
  • Ahead of tomorrow's Norwegian CPI release (Exp. 6.1% from 6.5%), Goldman Sachs write that a perfect storm exists for NOK, writing that NOK weakness has been overdue because of USD/NOK's inverse correlation with equity prices as well as the dovish December Norges Bank decision.
  • They see NOK under pressure going forward market prices a higher, longer Fed cycle, leaving smaller G10 CBs struggling to keep up due to higher rate sensitivity.
  • GS slightly revise their EURNOK forecast higher, seeing 10.80, 10.90 and 11.00 across their 3, 6 and 12 month forecasts.

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