PARIS (Agefi-Dow Jones)--In the foreign exchange market, the dollar and the pound sterling are among the currencies for which the short positions are the highest alongside the Norwegian krone (NOK). The short position on the latter even increased last week, according to estimates from BNP Paribas .

Conversely, the Swedish krona (SEK), which is also considered a cyclical currency, is showing a long position. "The NOK is very much tied to the outlook for oil prices," said Andreas Steno Larsen, head of strategy at Nordea. “Many traders have been betting on both a higher NOK and oil price as the global economy reopens in April-May but it is now clear that this scenario has taken a hit since the restrictive measures due to Covid-19 are multiplying again, which is problematic for oil,” adds the strategist.

Since early September the NOK has been falling again. "The NOK and SEK have, along with the sterling, the worst performance among major currencies since early September," said Nordine Naam, strategist at Natixis . "The depreciation of the Norwegian krone is more marked at -4.6% than that of the Swedish krona which fell by 3.1%", specifies the market operator. The renewed risk aversion is unfavorable to these two currencies which are very sensitive to economic growth and which are very illiquid.

The differentiated positioning on the two currencies and the performance differential can also be explained by a divergence in the macroeconomic situations. "The NOK is not only affected by the relapse in oil prices in September (from 46 dollars a barrel to 40 dollars) but also by core inflation of 3.7%", underlines Nordine Naam. “The Norges Bank is weakened in this context of weak growth and high inflation making it difficult to anticipate short rates, which weighs on the currency, notes the strategist.

The Norwegian central bank meets on Thursday. "We anticipate an unchanged rate at 0%," say JPMorgan economists. "The market will focus on the pace of the new rate policy and more specifically on whether the bank signals the start of a rate hike earlier than expected", anticipate the US bank's forecasters. In June, she had indicated that it would not be before the end of 2022.

The Riksbank left its rates and asset purchase program unchanged on Tuesday, noting a very gradual recovery in the economy. But it should maintain its monetary policy until early 2024, according to Oxford Economics, especially since inflation is well below its target.