NOK: Quietly The Worst G10 Performer vs EUR and USD Since Norges Bank

NOK has quietly been the worst performing G10 currency against the EUR and USD since the Norges Bank’s June 20 meeting, with heightened political uncertainty in mainland Europe (i.e. France) weighing on the risk-sensitive Scandis.

• Since June 21, spot returns have been -1.28% against the USD and -1.65% against the EUR.
• This is despite the Norges Bank delivering a more hawkish-than-expected decision on June 20, where likely timing of the first-rate cut was pushed back to 2025.
• Today’s moves see EURNOK 0.4% higher, on track for an 8th consecutive positive session. Clustered resistance at the 50/200-day EMAs (~11.49) has held, for now.
• Since 2000, EURNOK has averaged a 0.6% fall across the month of July, though this is skewed by >4% moves lower in July ’22 and ’23. Excluding these years, EURNOK has fallen 0.2% on average.
• NOK will likely remain sensitive to risk sentiment while French election uncertainty remains prevalent, though the recent sell-off may provide more attractive entry points to those looking to benefit from widening rate differential scenarios.