October was a strong month for Scandinavian currencies with both NOK and SEK being among the best G10 performers. High energy prices and a hawkish central bank supported the Norwegian krone, while the Swedish krona saw gains as expectations for policy tightening increased following higher inflation prints and GDP indicators. Looking ahead, we expect both currencies to remain strong until year-end, but next year could see more limited gains as the procyclical rally is expected to be less pronounced than previously thought given downgrades to global growth. Beyond this, the European Central Bank will likely have taken its first steps towards normalisation by the end of next year, which could strengthen the euro over the medium-term in our view.
Read the full NOK & SEK Update here:
Author: Ima Sammani, FX Market Analyst
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