Battle of the Vikings - Ragnar vs EarlIn the duel of the Nordic nations between the strong Norwegian Ragnar (NOK) and the fierce Swedish Earl (SEK), only one can survive.
I am betting my gold coins on the Norwegian krone for the following reasons:
- NOKSEK is fundamentally undervalued
-> fundamentally the pair should rather be trading at 1.04 - 1.05
- Norges Bank surprised EVERYONE (including me) with an interest rate hike last week
-> inflation is still giving it a hard time
- Oil saw some strength again recently
- NOKSEK with a seasonally strong phase in January and February
- Norges Bank could reduce its NOK sales in the new year
- Rebalancing flows
From a Swedish perspective:
- The unemployment rate has recently been higher than expected (looting Vikings are currently less in demand)
- Swedish inflation rate fell more than expected (due to house prices (no, not Viking huts))
- Riksbank sold more FX reserves than expected within its hedging programme
-> less powder available
