I get NOKed down.. but I get up again...
Updated
You're never gonna keep me down,
I get NOKed down, but I get up again,
You're never gonna keep me down!
Now that you all hopefully have the song stuck as much into your head as I have ;) we can go straight to the facts:
It is true that over the past two years, the Norwegian krone has all too often been one of the big losers in the FX market.
Not only has it embarrassingly been constantly beaten up against the EUR and traded at an all-time low, but it has even brought up the rear of ALL G10 currencies since November 2022.
This was hardly surprising as almost all fundamental factors spoke against the NOK.
However, the tide will turn dramatically in 2024, especially in the EURNOK:
NOK positive:
➡️ Energy prices appear to have bottomed out and could rise again.
➡️ The oil price appears to be stabilising at the USD 60-70 mark and could rise if necessary in the event of a soft landing
➡️ January and February are seasonally positive for the NOK
➡️ Norges Bank surprised EVERYONE in December by raising interest rates again
➡️ Norges Bank enters 2024 as one of the hawkishest of the G10 central banks
➡️ A further rate hike by Norges Bank in early 2024 cannot be ruled out
➡️ It would raise interest rates while virtually all other central banks would be in rate-cutting mode
➡️ Norges Bank will drastically reduce its NOK purchases from January (as previously announced by me in the NOKSEK Tradeidee), see here:
My CHFNOK Short should also be a sure winner in 2024:
I get NOKed down, but I get up again,
You're never gonna keep me down!
Now that you all hopefully have the song stuck as much into your head as I have ;) we can go straight to the facts:
It is true that over the past two years, the Norwegian krone has all too often been one of the big losers in the FX market.
Not only has it embarrassingly been constantly beaten up against the EUR and traded at an all-time low, but it has even brought up the rear of ALL G10 currencies since November 2022.
This was hardly surprising as almost all fundamental factors spoke against the NOK.
However, the tide will turn dramatically in 2024, especially in the EURNOK:
NOK positive:
➡️ Energy prices appear to have bottomed out and could rise again.
➡️ The oil price appears to be stabilising at the USD 60-70 mark and could rise if necessary in the event of a soft landing
➡️ January and February are seasonally positive for the NOK
➡️ Norges Bank surprised EVERYONE in December by raising interest rates again
➡️ Norges Bank enters 2024 as one of the hawkishest of the G10 central banks
➡️ A further rate hike by Norges Bank in early 2024 cannot be ruled out
➡️ It would raise interest rates while virtually all other central banks would be in rate-cutting mode
➡️ Norges Bank will drastically reduce its NOK purchases from January (as previously announced by me in the NOKSEK Tradeidee), see here:
My CHFNOK Short should also be a sure winner in 2024:
Note
📊🔮 The next focus will be on the EUR inflation data this week. It will show a rise in inflation and lift it back towards the 3% mark.-> This could put the ECB in the wrong boat, as this boost will only be temporary due to base effects and a one-off effect from the German energy price brake.
The February and March inflation data at the latest will clearly show the misconception of the ECB about higher inflation in the long term ✅️
Note
📊🇪🇺PPI Data out of the Eurozone will come weaker today than the consensus expects it.-> Great for my EURNOK Short!✅️
Note
📊🇪🇺As forecasted the PPI Data out of the Eurozone was weaker than the consensus expected it.-> easy✅️
📊🇪🇺The February CPI out of the Eurozone will be the most exciting EUR data since a long time, since it will determine when we will get the first ECB rate cut
-> My base case is still April✅️
Note
📊🇸🇯 Meanwhile, the CPI from Norway was slightly below expectations.-> The Norges Bank is unlikely to make any changes to interest rates for the time being.
➡️ The trade is therefore likely to take a little longer before it picks up speed.
Note
🟢The trade continues to oscillate rather sedately and lacks the final push to free it from its range.📊🇸🇯 The GDP data from Norway next week will at least provide us with new fodder for a breakout.
Note
This week we have the📊🇪🇺 PMI (Purchasing Managers' Index) for the eurozone and the
📊🇸🇯 interest rate decision by Norges Bank, two extremely important data points for the EURNOK.
-> Perhaps this week will finally provide the strong impulse to free the EURNOK from its multi-week range.
Note
🔮My crystal ball tells me:📊🇪🇺The EUR Inflation data (CPI) will come weaker today than the consensus expects it.
-> Maybe this will help my EUR Short!🟢
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