In the view of economists at Commerzbank, Norges Bank might become even more restrictive. Subsequently, the EUR/NOK pair could fall below the 10 level.
Real interest rates in Norway to be in negative territory more quickly than in the eurozone
“With the publication of the Norwegian inflation data for May, the likelihood of Norges Bank signaling an even tighter rate path than previously at its meeting on 23rd June has risen slightly. A 50 bps rate hike cannot be excluded completely either.”
Yes, the ECB will also hike its key rate. However, Norges Bank too started this process a long time ago and, in my view, this is going to be accelerated further. The real interest rates in Norway are therefore likely to leave negative territory more quickly than in the eurozone. That suggests that EUR/NOK will be able to fall to 10 and also below.”