Rabobank's Senior FX Strategist Jane Foley has highlighted the Norwegian Krone (NOK) as the strongest G10 currency across multiple timeframes, attributing its performance to robust oil prices, above-target inflation, and a hawkish stance from Norges Bank [1]. Norway's status as Europe's largest energy exporter and resilient domestic demand are also cited as key supportive factors for the NOK [1].
Foley expects the EUR/NOK exchange rate to drift lower, revising Rabobank's 3-month target to 10.80 from 10.90, and maintaining a 12-month target near 10.50 [1]. She states, "We continue to see scope for a gentle move lower in EUR/NOK towards 10.50 on a 12-month view" [1].
Currently, market rates suggest little risk of a rate hike by Norges Bank next month, but Foley notes that these odds could change depending on the release of August CPI inflation data on September 10 [1]. She also points to ongoing speculation about the Iran war and the potential for Norges Bank to hike rates again as reasons to favor buying NOK versus the EUR [1].
The NOK remains the best performing G10 currency year-to-date, half-year-to-date, over the past month, and in the last five trading sessions, although EUR/NOK is still above its spring lows [1]. Expectations of further policy action and Norway's energy export position continue to support the currency [1].
CONCLUSION
Rabobank anticipates further appreciation of the Norwegian Krone against the Euro, driven by strong fundamentals and potential policy moves. The outlook remains positive, with key data releases and geopolitical developments likely to influence market expectations.