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UBS Forecasts Norwegian Krone to Strengthen, Targeting 10.50 EUR/NOK 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 on the EUR/NOK currency pair despite its recent rally. The bank projects the pair will gradually decline to 10.50 over the next twelve months, suggesting krone outperformance.
UBS Forecast Details
In a note to clients, UBS outlined a series of price targets that reflect its conviction in renewed krone strength. The bank recommends that traders consider entering short positions on the EUR/NOK at current levels or selling into any further upside.
UBS's specific quarterly forecasts for the EUR/NOK exchange rate are as follows:
- September 2026: 10.80
- December 2026: 10.70
- March 2027: 10.60
- June 2027: 10.50
Market Context and Rationale
AdThe forecast comes after the Norwegian krone recently gave back approximately half of its year-to-date gains against the euro. According to UBS, this weakness was driven by a combination of falling oil prices and heightened expectations for global interest rate hikes, which can impact risk-sensitive currencies like the NOK.
Despite this recent performance, the bank attributes its bearish stance on the pair to a supportive external environment that it believes will ultimately favor the krone. UBS also highlighted the currency's "attractive carry" as a key factor that should underpin its value going forward.
Implications for Investors
The analysis from UBS suggests that the recent pullback in the krone's value may represent a strategic entry point for investors rather than a reversal of the longer-term trend. The forecast implies that macroeconomic fundamentals are poised to reassert themselves, driving capital flows back into the Norwegian currency and pushing the EUR/NOK rate lower over the coming year.