Eurnok Rally Losing Momentum

UBS maintains a bearish bias on the EURNOK pair, viewing the recent rally as a temporary correction. They recommend initiating short positions as the krone's fundamental support remains intact.

Key Takeaways

• 1.We maintain a bearish bias on EURNOK, expecting the NOK to continue outperforming as the external economic environment remains supportive.
• 2.Recent upward pressure on EURNOK was driven by lower oil prices and hawkish central bank expectations, but this momentum is fading.
• 3.Norges Bank is expected to hike rates in August, reinforcing the Norwegian krone's appeal as a high-yielding currency.

Table of Contents

• Rally comes to an end
• CIO Forecast- EURNOK
• Negative long term trend
• EURNOK rebound has been significant and is vulnerable to a reversal
• Investment considerations
• Appendix

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