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The Currency Market Under Scrutiny. The Zloty at Historically High Levels
Experts point to the possibility of a gradual strengthening of the krone in the coming months. Fot. Adobe Stock, licencja standardowa
The Norwegian krone remains at historically weak levels. At the end of December, the EUR/NOK exchange rate is close to the level from the beginning of 2025. The pressure on the Norwegian currency may gradually ease. The situation is influenced by central bank decisions, global conditions, and currency market liquidity.
According to Infront data, on Christmas Day one euro cost about 11.80 NOK. This means a slight strengthening of the krone compared to the weakest levels in the recent period.
During the last meeting on December 18, Norges Bank left interest rates unchanged. After this decision, the EUR exchange rate temporarily exceeded 12 NOK.
During the last meeting on December 18, Norges Bank left interest rates unchanged. After this decision, the EUR exchange rate temporarily exceeded 12 NOK.
Limited Growth Potential for the Euro
Nordea Markets assesses that the potential for further strengthening of the euro against the krone is limited. Senior strategist at Nordea Markets, Sara Midtgaard, points to low currency market liquidity at the end of the year.
Such a situation favors stronger exchange rate fluctuations during the Christmas and New Year period. According to the bank's forecasts, the euro rate may fall towards 11.75 NOK in the first quarter.
In December, the situation of the Polish zloty also changed. On December 10, the currency exceeded the level of 2.80 NOK and rose to 2.84 (December 16-17). In the last days of December, it stabilized in the range of 2.79-2.81 NOK.
Such a situation favors stronger exchange rate fluctuations during the Christmas and New Year period. According to the bank's forecasts, the euro rate may fall towards 11.75 NOK in the first quarter.
In December, the situation of the Polish zloty also changed. On December 10, the currency exceeded the level of 2.80 NOK and rose to 2.84 (December 16-17). In the last days of December, it stabilized in the range of 2.79-2.81 NOK.
In December, the zloty remained at the level of 2.77-2.84 NOK. These are historically high levels.Photo: Adobe Stock, standard license
The Dollar's Situation Is Different
The situation of the US dollar is different, as it has weakened against many currencies, including the krone, since the beginning of the year. The USD rate has dropped by more than 12 percent and is now around 10 NOK.
DNB Carnegie points out that earlier pressure on the krone was due, among other things, to low risk appetite, changes in interest rate expectations, and seasonal factors. According to the bank, some of these factors may lose significance after the turn of the year.
DNB Carnegie points out that earlier pressure on the krone was due, among other things, to low risk appetite, changes in interest rate expectations, and seasonal factors. According to the bank, some of these factors may lose significance after the turn of the year.
Oil and Planned Currency Purchases
Support for the Norwegian currency may also come from planned actions by Norges Bank and the situation on the oil market. The International Energy Agency forecasts oil prices in the range of 55–60 dollars per barrel in the first quarter.
From January 2, the central bank is set to start daily currency purchases worth 950 million NOK. According to Nordea, these actions may to some extent support the krone's exchange rate in the coming months.
From January 2, the central bank is set to start daily currency purchases worth 950 million NOK. According to Nordea, these actions may to some extent support the krone's exchange rate in the coming months.
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