The post Why the NOK is still struggling – Commerzbank appeared on BitcoinEthereumNews.com. The Swedish Krona (SEK) has significantly outperformed all other G10 currencies this year, including the Norwegian krone. There are good reasons for the SEK’s outperformance; one of the most important is the presence of major defense companies. At a time when Europe wants to increase defense spending, this is certainly not a disadvantage, Commerzbank’s FX analyst Michael Pfister notes. Norges Bank is likely to stay on hold for the time being “Did the NOK lag behind solely due to reasons specific to the SEK? I have my doubts. You may recall that last year, we published several hotspots to determine the reasons behind the NOK’s exceptional weakness at that time. The NOK is heavily dependent on oil price developments. This is certainly not unexpected for a country that is one of the world’s leading oil exporters. However, the oil price has fallen significantly this year, largely due to increased supply from OPEC+ countries. The krone is also suffering as a result.” “In January, we emphasized that real interest rates were a key factor in the weaker krone. Over the past 15 years or so, Norwegian real interest rates have consistently lagged slightly behind those of other countries. At first glance, one might think that this has changed, given that Norges Bank was one of the last central banks in this interest rate cycle to start cutting rates. However, inflation is also significantly higher and more persistent in Norway than in other countries. Yesterday’s figures, which once again came in higher than expected, made this clear once more. It is possible that the figures were just an upward outlier. Even if this is the case, it is clear that Norwegian real interest rates have barely exceeded Swedish rates in recent months.” “According to our commodity analysts, the oil price is likely… The post Why the NOK is still struggling – Commerzbank appeared on BitcoinEthereumNews.com. The Swedish Krona (SEK) has significantly outperformed all other G10 currencies this year, including the Norwegian krone. There are good reasons for the SEK’s outperformance; one of the most important is the presence of major defense companies. At a time when Europe wants to increase defense spending, this is certainly not a disadvantage, Commerzbank’s FX analyst Michael Pfister notes. Norges Bank is likely to stay on hold for the time being “Did the NOK lag behind solely due to reasons specific to the SEK? I have my doubts. You may recall that last year, we published several hotspots to determine the reasons behind the NOK’s exceptional weakness at that time. The NOK is heavily dependent on oil price developments. This is certainly not unexpected for a country that is one of the world’s leading oil exporters. However, the oil price has fallen significantly this year, largely due to increased supply from OPEC+ countries. The krone is also suffering as a result.” “In January, we emphasized that real interest rates were a key factor in the weaker krone. Over the past 15 years or so, Norwegian real interest rates have consistently lagged slightly behind those of other countries. At first glance, one might think that this has changed, given that Norges Bank was one of the last central banks in this interest rate cycle to start cutting rates. However, inflation is also significantly higher and more persistent in Norway than in other countries. Yesterday’s figures, which once again came in higher than expected, made this clear once more. It is possible that the figures were just an upward outlier. Even if this is the case, it is clear that Norwegian real interest rates have barely exceeded Swedish rates in recent months.” “According to our commodity analysts, the oil price is likely…