Story
UBS Forecasts Norwegian Krone Appreciation, Sets EUR/NOK Target at 10.50
Summary
Analysts at UBS maintain a bearish outlook on the EUR/NOK currency pair, forecasting a steady appreciation of the Norwegian krone through mid-2027 despite its recent pullback.
UBS analysts are forecasting a sustained appreciation of the Norwegian krone (NOK) against the euro, maintaining a bearish outlook for the EUR/NOK pair through mid-2027. The bank's projection comes despite a recent period of weakness that has seen the krone give back some of its earlier gains this year.
UBS Price Targets
In a note to clients, UBS laid out a path for the krone's expected strengthening. The bank projects the EUR/NOK exchange rate will decline progressively over the next year, setting the following targets:
- September: 10.80
- December: 10.70
- March 2027: 10.60
- June 2027: 10.50
UBS attributes its stance to a supportive external environment that it believes will favor renewed krone strength. The bank also highlighted the currency's "attractive carry," referring to the potential return from the interest rate differential between the two economies. Based on this outlook, UBS recommends that investors consider entering short positions on the pair.
AdMarket Context
The forecast contrasts with the krone's more recent performance. According to the UBS analysis, the Norwegian currency has retraced approximately half of its year-to-date gains versus the euro.
This pullback was reportedly driven by pressure from falling oil prices—a critical factor for Norway's economy—and heightened expectations for interest rate hikes globally. Despite these headwinds, UBS expects the Norwegian krone to resume its outperformance against the euro.