EUR/NOK drops to lows near 9.6200 post-NB Survey

• Norges Bank Regional Network Survey came in on an upbeat tone.
• NOK appreciates to the 9.6200 area vs. the European currency.
• The Survey signals a pick up in output growth in the next 6 months.

The Norwegian Krone is gaining further traction on Tuesday and is now dragging EUR/NOK to the proximity of the 9.6200 handle, recording fresh daily lows at the same time.

EUR/NOK weaker on Norges Bank

NOK picked up pace after the Norges Bank’s Regional Network Survey came in at 1.42, improving from the previous 1.19 reading.

According to the Survey, contacts reported a higher output growth than the observed in November, noting as well an important growth in public sector demand, further improvement in export markets and higher demand from the oil sector.

Furthermore, contacts now expect the output growth to improve in the next six months, while employment growth should also remain moderate over the next three months.

NOK remains underpinned by solid fundamentals in the Scandinavian economy, prospects of a rate hike by the Norges Bank later in the year and an optimistic outlook on crude oil, while concerns over house prices and household debt levels appear to have mitigated as of late. It is worth mentioning that the Nordic central bank lowered its inflation target to 2% from 2.5% last week, in line with its G10 peers.

EUR/NOK significant levels

As of writing the cross is losing 0.19% at 9.6276 and a breakdown of 9.5452 (low Mar.2) would open the door to 9.5269 (200-day sma) and then 9.5252 (2018 low Jan.29). On the upside, the next hurdle emerges at 9.6910 (high Mar.2) seconded by 9.7205 (high Feb.23) and finally 9.8812 (2018 high Feb.9).