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UBS Forecasts Norwegian Krone Appreciation Against Euro Through Mid-2027
UBS strategists are forecasting a steady appreciation for the Norwegian krone (NOK) against the euro through mid-2027, maintaining a bearish view on the EUR/NOK currency pair. The bank anticipates that a supportive external environment and attractive carry will drive the krone higher, reversing some of its recent losses.
Forecast and Rationale
According to a note from the bank, the recent weakness in the krone—which has retraced about half of its year-to-date gains versus the euro—presents a strategic entry point for investors. UBS attributes the pullback to falling oil prices and heightened expectations for global interest rate hikes.
Despite these headwinds, UBS projects a consistent decline for the EUR/NOK exchange rate over the coming year. The bank's price targets are:
- 10.80 by September
- 10.70 by December
- 10.60 by March 2027
- 10.50 by June 2027
AdMarket Implications
UBS's outlook is based on the view that favorable macroeconomic conditions will ultimately outweigh recent pressures, allowing the krone to resume its outperformance. The bank also highlighted the pair's attractive carry, which refers to the potential profit from the interest rate differential between the two currencies.
Based on this forecast, UBS recommends that traders consider entering short positions on the EUR/NOK pair at current levels or selling into any rallies. This strategy would profit from a decline in the exchange rate as the Norwegian krone strengthens against the euro.