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###POV: NOK'S RECOUPLING WITH BRENT COULD.......>

NOK
NOK: ###POV: NOK'S RECOUPLING WITH BRENT COULD TRIGGER FURTHER STRENGTH
-Late January saw the lowest correlation (just +0.12) between the NOK TWI and
the active Brent crude futures contract since late 2014. The correlation has
recovered (last seen at circa +0.26) but remains well below the 2015-date
average of +0.4.
-Political risk has hurt the NOK on two fronts: a confrontation with the EU over
the Third Energy Package and a political scandal surrounding the country's
Justice Minister. Both those issues were resolved this week, but the currency is
yet to catch up with Brent crude's near 5% rally since Monday. With the oil-NOK
correlation on the mend, further NOK strength may follow to close this gap.
-USD/NOK has already found resistance today on an approach into the NOK 7.7924
mark, the downward trend line which has touched nearly four times since the
December highs.
-The most profitable trading strategy for USD/NOK of the past 12 months has been
the Triangular MA strategy, which continues to suggest a short USD/NOK position
dating back to Mar12.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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