Story
UBS Forecasts Norwegian Krone to Strengthen, Sets EUR/NOK Targets Through Mid-2027
Summary
UBS maintains a bearish outlook on the EUR/NOK currency pair, projecting a steady appreciation for the Norwegian krone against the euro despite a recent pullback.
UBS is forecasting a sustained strengthening of the Norwegian krone (NOK) against the euro through mid-2027, maintaining a bearish outlook on the EUR/NOK currency pair. The bank's analysts recommend investors consider short positions at current levels, anticipating a reversal of the krone's recent weakness.
UBS Price Targets
In a note to clients, UBS outlined a series of price targets that see the EUR/NOK pair steadily declining over the next year. The bank's forecast projects the exchange rate will fall to the following levels:
- 10.80 by September
- 10.70 by December
- 10.60 by March 2027
- 10.50 by June 2027
Based on this outlook, the bank suggests that traders could either enter short positions now or sell into any upward price movements in the pair.
AdRationale and Market Context
The forecast comes after the Norwegian krone recently gave back approximately half of its year-to-date gains versus the euro. UBS attributes this pullback to pressure from falling oil prices and heightened expectations for global interest rate hikes.
Despite these headwinds, the bank believes the krone is poised to resume its outperformance. Analysts at UBS point to a supportive external environment and an "already attractive carry" as key factors that should favor renewed strength for the Norwegian currency.