OSLO (Reuters) – The Swedish and Norwegian currencies will turn stronger against the euro in coming months, reversing a trend seen so far this year, and will continue to gain ground against the dollar, a Reuters poll predicted on Friday.
The central banks of both countries in recent weeks removed long-held easing bias from their interest rate outlook, prodded in part by a U.S. Federal Reserve rate increase and the European Central Bank’s hardening its dovish stance.
Norway’s crown appeared poised for the biggest moves in the next 12 months. It was forecast to gain 5.5 percent from current levels against the dollar and 5.6 percent against the euro, the poll showed.
The Swedish crown was expected to rise by 4.0 percent against the dollar and 4.4 percent against the euro over the coming year.
“The Norwegian crown is too weak compared to the underlying fundamentals. The economy is improving, the oil price has picked up and the currency hasn’t fully incorporated these developments,” Nordea Markets economist Erik Bruce said.
“As for Sweden, the central bank is done with rate cuts, and we believe the economy will be strong enough to accommodate an increase in rates next year,” he said.
The Norwegian crown was forecast to strengthen to 8.99 against the euro and 7.91 versus the dollar in the next 12 months from its current 9.52 and 8.37.
The Swedish crown was expected to rise to 9.20 against the euro and 8.13 versus the dollar during the next year from 9.62 and 8.46 currently.
(Writing by Terje Solsvik; Polling by Sujith Pai and Krishna Eluri; Editing by Larry King)