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1 Mar 2013
Forex Flash: NOK/SEK potential upside lays ahead – Danske Bank
The pair is navigating the lower end of today’s range, as the Swedish krona has emerged stronger than its neighbour the NOK in the wake of the data from both Scandinavian economies this early morning, dragging the cross to session lows around 1.1630, levels seen last time in February 2011
“It seems obvious that Sweden was hurt much earlier by the weak growth in the Euro Zone and is now recovering. Norway on the other hand is felling the headwind with a lag. Even though NOK/SEK looks oversold from a technical perspective (14d RSI below 25) the cross might have further downside potential as the market is still able to price out risk of a new rate cut in Sweden and further flatten the FRA-curve in Norway”, commented A.Lohman Rasmussen, Chief Analyst at Danske Bank.
“It seems obvious that Sweden was hurt much earlier by the weak growth in the Euro Zone and is now recovering. Norway on the other hand is felling the headwind with a lag. Even though NOK/SEK looks oversold from a technical perspective (14d RSI below 25) the cross might have further downside potential as the market is still able to price out risk of a new rate cut in Sweden and further flatten the FRA-curve in Norway”, commented A.Lohman Rasmussen, Chief Analyst at Danske Bank.