Norwegian Krone At Nine Year Low, US Dollar Bullish

Published: 22 Aug at 4 PM Tags: Euro, Dollar, America, Eurozone, USA, India, Norway, Sweden,

With interest rate concerns heating up in both Sweden and Norway, the Nordic country’s currencies have clashed.

During European trading the Norwegian Krone sank to an almost nine-year low against its Swedish rival, weakening to 1.0712 Swedish Krona.

The last time the NOK/SEK pairing was at this level was in the spring of 2004.

The Krone has been trapped in a bearish relationship with several of its peers since data published earlier in the week showed that the Norwegian economy grew by considerably less than anticipated in the second quarter of the year.

Sweden’s currency was also boosted against its Norwegian rival by the news that Swedish unemployment dropped from 9.1 per cent in June to 7.2 per cent in July. The better-than-anticipated result has increased the odds of the Swedish central bank issuing a rate increase.

As currency strategist Carl Hammer notes; ‘It all started off with rather weak GDP numbers in Norway. The GDP number itself, while disappointing, [was] driven by temporary factors in inventory adjustments rather than in more important factors for growth. [...] In a long term perspective the Norwegian Krone is approaching more attractive levels.’

In other currency news, the Rupee plunged to yet another record low as the US Dollar extended gains following the release of a report which showed that US jobless claims eased to a five year-low.

US house prices also climbed and a gauge of US indicators increased by more than forecast, advancing 0.6 per cent in July rather than the 0.5 per cent expected. The gauge measures the outlook for the next three to six months.

The Dollar consequently consolidated gains against peers like the Euro.

In response to the ‘Greenback’s upward movement New York-based senior currency strategist Eric Viloria commented: ‘We think tapering is on track – we haven’t seen any deterioration to show otherwise. We’re seeing a decline in the Euro because it’s being driven more by these Dollar factors and by the expectations of tapering.’
As of Thursday, 22nd August 2013, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1669, GBP USD exchange rate was 1.5591, GBP INR exchange rate was 100.5723, and GBP NOK exchange rate was 9.5193.

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