The Norwegian krone fell a little against the US dollar today and may retreat even further on speculations that policy makers will try to push the exchange rate down. The currency remained firm against the euro.
Norges Bank Deputy Governor Jan Qvigstad said that the strength of the currency may prevent the central bank from raising interest rates. Previously, Finance Minister Sigbjoern Johnsen suggested that the bank’s monetary policy should avoid pushing the krone to the upside.
Amid all the uncertainty and fear that were haunting markets in the last year investors were seeking some safe refuge for their capital. Norway with its AAA credit rating looked very attractive, especially compared with other European countries, increasing demand for the country’s assets. That caused a massive appreciation of the krone. According to Organization for Economic Cooperation and Development, the currency is 40 percent overvalued, beating both the Swiss franc and the Australian dollar.
USD/NOK rose from 5.5706 to 5.5714 as of 5:47 GMT today. EUR/NOK fell from 7.4030 to 7.4003.
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