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UBS Forecasts Norwegian Krone to Strengthen Against Euro by Mid-2027
UBS analysts are forecasting a sustained strengthening of the Norwegian krone (NOK) against the euro (EUR) through mid-2027, maintaining a bearish outlook for the EUR/NOK currency pair. This projection comes despite the krone recently retracing approximately half of its year-to-date gains versus the single currency.
Forecast Details
According to a note from the bank, the recent weakness in the NOK was influenced by falling oil prices and heightened expectations for global interest rate hikes. However, UBS believes a supportive external environment and attractive carry—the return from holding a higher-yielding currency—will drive renewed krone strength.
UBS provided a specific timeline for its EUR/NOK forecast:
- September: 10.80
- December: 10.70
- March 2027: 10.60
- June 2027: 10.50
AdMarket Implications
The bank's outlook suggests that the recent NOK depreciation presents a favorable entry point for investors. UBS recommends that clients consider entering short positions on the EUR/NOK pair at current levels or selling on any further upside moves.
A lower EUR/NOK rate signifies a stronger krone. The forecast implies that fundamental factors are expected to outweigh recent headwinds, allowing the Norwegian currency to resume its outperformance against the euro over the coming year.