As has typically been the case over the past 5-years price action in NOK/SEK has been typically characterized by selling into the yearend before posting a notable rebound in Q1.
NOK/SEK 5-year Average Seasonality (Chart 1)
We expect this to be the case yet again for 2020. Given the monetary policy divergence between the Riksbank and the Norges Bank with the latter hiking twice as many times (4) as the Riksbank over the past 16-months, current valuations look to be somewhat on the low side for the Norwegian Krone, as such, we expect carry support to bode well for NOK/SEK.
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--- Written by Justin McQueen, Market Analyst
To contact Justin, email him at Justin.mcqueen@ig.com
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