The Norwegian krone has been the worst G10 performer against the US dollar by some way in recent months. Though lower energy prices and weakening risk sentiment have likely played a role, we suspect foreign exchange transactions by Norges Bank are also partly to be blame. With the krone looking severely undervalued by most metrics, we expect a rebound later this year once near-term pressures have passed.
In view of the wider interest, we are also sending this FX Update to clients of our Nordic & Swiss Economics service.
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