Immediately after the Norges Bank dropped interest rate decision and updated forecasts for the Norwegian economy Thursday morning, went to the crown stronger and stronger and stronger.
A euro costs, for example, 9,10 million on Thursday afternoon, which is about 14 cents cheaper than it was just before the clock 10. It is equivalent to an increase of 1.4 per cent.
– I think the central bank was surprised by the reaction in the crown, ” says chief strategist Erica Blomgren, Seb to E24.
Small kuttsannsynlighet
Norges Bank decided as expected to keep the key rate unchanged, but chose to enter a relatively moderate probability of rate cuts going forward.
– So we are now considering the prospect, the key policy rate should most likely remain at the current level in the near future, said the governor Øystein Olsen in the press release that accompanied the interest rate decision.
In its forecasts for the development in the crown, waiting Norges Bank that the import exchange rate (I44), which is weighted against the currencies of Norway’s 44 largest trading partners, will be strengthened moderately.
– Is there reason to believe that the crown will strengthen more than Norges Bank adds to the reason?
Absolutely. It’s going to happen.
Blomgren points out that kronebevegelsen in the wake of the interest rate decision is actually stronger now than Norges Bank waiting will be in the fourth quarter.
Oljebremsen have contributed to the weakening of the krone exchange rate massively, and this has been highlighted as an important shock absorber for a weakened Norwegian economy.
Kronesvekkelsen has in fact wiped out a sharp aggravation of competition relative to overseas. A weaker krone contributes to, among other things, that exporters are getting more bang for every product and service sold.
On the other hand, companies pay more to import goods, which among other things helps to explain why inflation has shot so much of Norges Bank’s inflation target of 2.5 per cent.
the Crown, however, has strengthened in recent months, and is now at the strongest levels in over a year against several major currencies.
– if it Had been so that it had been made large adjustments in the long-term kroneprognosen, had the market interpreted it as a signal that the Norges Bank accepts a stronger dollar, ” says Blomgren.
It could in that case led to an even more powerful styrkelse of the crown.
– With a certain probability for rate cuts in the rentebanen, trying to avoid a strong kronereaksjon, ” she says.
Euro during the nine?
It is not sure it manages, according to the chief analyst for foreign exchange at Nordea Markets, Ole Håkon Eek-Nielsen.
– There are some levels that are interesting. We have seen several times that the crown has bottomed out against the euro at 9,15. Now is the lower, which can make that the crown will get more international attention ahead, he says to E24.
– Foreigners have been wary of the crown for a long time. It may be that this turns them a bit. It may nicely be that the euro goes under nine million now, ” he says.
He is not particularly surprised by the powerful kronebevegelsen Thursday.
This was so duete Norges Bank managed to be given the changes in the Norwegian economy the last time, ” he says.
chief analyst in Nordea Markets, Ole Håkon Eek-Nielsen
– It has been a little strange, is that the crown has not gone more before. Probably this is due to a kronemarked that are a little bit skeptical of key performance indicators because it has noted that Norges Bank interprets it the way they want. It would have to wait until the evidence came, and they came in today, ” says sjefanalytikeren.
Speculators back
Many of the short-term profittsøkerne in the foreign exchange market, also known as speculators, have kept away from the crown in light of the uncertain times in the Norwegian economy.
Valutastrateg Magne Østnor DNB Markets believe that this may be about to turn.
– When the promises rentebanen so much, it is clear that this is a kjøpsnyhet for the crown, says Østnor to E24.
– There are many who have burned out on the crown the last few years, and it therefore has not been a trade speculators have done with great conviction. Now, I think we will see increased interest for the money. Norges Bank confirmed what we and others believe to see: That the worst is behind us, ” he says.
Olsen: The price of oil will keep the crown weak
Governor Øystein Olsen responds to questions about the factors that will keep the crown weak when oljebremsen seems to slow down:
– It is natural to point on the price of oil, he says to E24.
– Over two years we have seen a close connection between the fall in oil prices and developments in the crown. It is quite obvious that the players in the foreign exchange market can understand that when the price of oil has fallen to a much lower level, and we can’t expect that it comes on the old levels, so do the Norwegian economy, a weaker realkurs.
Oljedilemma
– Norges Bank has been an extraordinarily unpredictable
And the image consists in the sense that although it runs a little better, we are not through readjustments. There is clearly a need for a weaker realkurs in each case, a better competitive position than we had three years ago. I believe this will be reflected in the kronemarkedet also.
Østnor believe that oil prices will be crucial for how much Norges Bank will allow the exchange rate to be strengthened going forward.
– It becomes a dilemma for them now, if not the oil price should come up. It is not far to nine dollars for a euro. I am strengthened in the belief of a stronger Norwegian krone, and I’m probably not alone in thinking that the crown is underpriset, ” he says.
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