07:21 AM EDT, 06/13/2025 (MT Newswires) -- Norway's Norges Bank will receive two crucial inputs next week: a relatively dovish May consumer price index print that missed core inflation expectations, and a Regional Network Survey showing resilient economic activity, said UBS.

These factors point to a likely rate cut in September, which markets have already priced in, wrote the bank in a note to clients.

Whether Norges Bank's forward guidance reaffirms

that view will matter greatly on Thursday, stated UBS. The krone (NOK) has resumed its appreciation trend versus the euro (EUR) and gained slightly against Sweden's krona (SEK).

If policymakers push back against expectations of a September cut, the NOK could strengthen further, pointed out the bank. Should they confirm market expectations, UBS expects a muted response.

The bank sees the NOK as good diversification away from the US dollar (USD) and euro (EUR) for long-term investors. WUBS also likes selling EURNOK upside above 11.70 for potentially better entry levels.

UBS predicts that Sweden's Riksbank, at Wednesday's policy meeting, to cut rates again. Markets are divided on the outcome, but weak Swedish data and a dovish surprise from the flash May CPIF at 2.3% year over year support further easing.

While uncertainty has weighed on the krona, Sweden's relatively favorable repatriation flows have helped it remain resilient, added the bank. Another rate cut would likely weaken the currency only briefly, leaving the broader downward trend in EURSEK intact.

Potential European Union retaliation in the event of broader United States tariffs is a more significant risk to Sweden's outlook -- and as such to the krona -- than an additional rate cut. UBS views EURSEK as a short on rallies and favor selling the upside above 11.20 to gain exposure at more attractive levels.

http://www.mtnewswires.com
Copyright © 2025 MT Newswires. All rights reserved. MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.