When we at the beginning of the year said that we thought it was more likely that the NOK would appreciate rather than depreciate, it was built on two basic arguments: One was that we thought the price of oil would rise from about USD 30 that we see at the beginning of 2016, and that this would provide some upward pressure on the NOK. The second was that the NOK already had fallen significantly for three consecutive years, and that although it is still likely that the currency need to go even further down to support a real restructuring of the Norwegian economy, it is rare that such a weakening move in a straight line.

Oil prices have risen about 50% since January this year, while NOK has appreciated by 6-7%. It can of course be argued that the NOK appreciation is not very large relative to the rising oil prices. Thus, it is not too suprising that one does not see such a large impact on the NOK now that the oil prices have fallen just over 10% as most do not consider that oil prices will continue to fall. Another cause is of course that Norges Bank has lately leaned more against an aggressive interest rate path, and with it, it has more than hinted that Norwegian interest rates in the foreseeable future will be a above the interest of the countries around Norway. It is not certain that was exactly what Norges Bank meant to say, but that's the way it's been percieved, something that helps to support a stronger Norwegian krone.

Regarding the Norwegian stock market, the same argument can in many ways benefit a similar reasoning. Oslo Børs has done significantly better than the rest of the European stock exchanges this year (with the exception of the Moscow Stock Exchange), but the question is very much if this is in relation to the oil price rise or if there are other cause. Therefore, the stock market have not been much impacted by the recenct fall in oil prices, as investors do not believe in any further weakening of oil prices in the long run. If oil prices were to weaken from this level, for example down below $ 40, we will probably see a stronger reaction in both equity and currency markets.