MUFG
2026 FX Outlook: Post-Peak USD World
LIVE19 December 2025USD bearish
Back to CurrenciesBullish
USD/NOK
Most undervalued G10 currency
MUFG Forecast Path
vs Prior ForecastCurrent target: 9.4Prior target: 9.5Revision: -1.1%
Cross-Firm Forecast Comparison
Key Drivers
Oil prices
Norges Bank policy
European growth
REER undervaluation
Fiscal surplus
All Firm Targets (Dec '26)
GSBullish9.50
JPMBullish9.42
MUFGBullish9.40
MSBullish9.40
BARCBullish9.40
BofABullish9.35
DBStrongly Bullish9.15
INGVery Bullish9.10
Key Issues for 2026
1.NOK is the most undervalued G10 currency on both REER and PPP metrics
2.Norges Bank on hold at 4.5% provides the highest yield in G10
3.Oil price stability above $70 supports Norwegian fiscal position
4.European growth spillover benefits via trade linkages
5.Part of commodity currency overweight alongside AUD
Risk Scenarios
Bull case9.00-9.20
Oil above $85, European growth boom, Norges Bank hawkish
Base case9.40-9.60
Oil stable $70-80, European growth broadens, yield advantage maintained
Bear case10.50-11.00
Oil collapse below $60, European recession, NOK liquidity crisis
Analysis Summary
NOK is part of our commodity currency overweight alongside AUD. Norges Bank on hold maintains highest G10 yield. Oil price stability and European growth spillover support. EUR/NOK to decline as NOK undervaluation corrects.