After staging a strong rebound through the first half of this month, the NOK corrected sharply lower again over the past week. At the same time, the SEK hit a new record low against the EUR. Economists at MUFG Bank discuss Scandi currencies' outlook.

Hawkish central bank updates failing to turn the tide

The Scandi currencies of the NOK and SEK both remain vulnerable to further weakness in the near term.

The hawkish policy updates from the Norges Bank and Riksbank are not sufficient on their own to trigger a sustained reversal of the weakening trends that have driven both currencies to deeply undervalued levels this year.