Story
UBS Projects Norwegian Krone to Strengthen Against Euro by Mid-2027
Analysts at UBS are forecasting a sustained strengthening of the Norwegian krone (NOK) against the euro (EUR) over the next year, maintaining a bearish outlook on the EUR/NOK currency pair despite its recent losses.
Krone Strength Forecast
UBS projects a steady decline in the EUR/NOK exchange rate, suggesting the krone will continue to outperform the euro. The bank recommends that investors consider entering short positions on the pair at current levels or selling into any rallies.
The bank's specific price targets for EUR/NOK are:
- 10.80 by September
- 10.70 by December
- 10.60 by March 2027
- 10.50 by June 2027
AdMarket Context and Rationale
The forecast comes after the Norwegian krone has given back approximately half of its year-to-date gains versus the euro. According to UBS, this recent weakness was driven by falling oil prices and heightened expectations for global interest rate hikes.
However, the bank believes the fundamental picture remains positive for the krone. UBS attributes its bearish stance on EUR/NOK to a supportive external environment and what it describes as attractive carry, which should favor renewed strength in the Norwegian currency.