The Norwegian Krone had a very volatile day on Friday, sparking around but ultimately finishing higher.
The Swedish Krona has fallen off a cliff in recent days, and EUR/SEK has skyrocketed as worries over a downturn in the superheated Swedish housing market which might take a dovish axe to the green-shoots of hawkishness at the Riksbank.
FX strategists at Danske Bank are holding on to their short EUR/NOK and Long NOK/SEK trades as the Krone continues to trade firmly despite risk-off market conditions.
Key Quotes
“The NOK’s resilience to risk-off, a stronger USD and lower oil price this week continues
“While the global environment challenges the Norwegian currency, the coming week will bring a series of key releases: house prices [today], Regional Network Survey (Tuesday) and inflation (next Friday).
"In our view, the balance of risks for these releases are skewed to the upside, which could spark market speculation of an earlier Norges Bank rate hike already in September (vs. base case December).
"Hence, we still like to hold on to our long NOK positions in the likes of short EUR/NOK and long NOK/SEK”.