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Forex pairs in this Article » EUR/NOK (Barcelona) - Sebastien Galy, Senior FX Strategist at Societe Generale notes that safe-haven currencies have collapsed one after another since the ECB won its battle and left the Euro shining.

However, he feels that the bursting of the safe-haven bubble has not yet spread as far as the NOK, the SEK or NZD. He adds, "The residual NOK strength has been supported by portfolio investment inflows. It is also consistent with the moderate drop in the EURNOK cross-currency basis swap, compared with other 'safe-havens'. However, he feels that the economy is overheating while suffering from a loss of competitiveness. The Norgesbank thus faces a dilemma and is unlikely to hike before the normalisation of the currency over valuation. Galy finishes by noting that "After the JPY and CHF, the NOK may be the next one to capitulate."
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