Norwegian Krone Jumps to Nine-Year High Against Euro Before Erasing Gain
Norway’s krone jumped as much as 0.7 percent against the euro in a few minutes of trading amid speculation the currency’s recent gains caused some traders to end bets it would weaken.
The surge pushed the Nordic currency to a nine-year high versus the 17-nation euro, extending its advance in the past three months to as much as 5.2 percent. It later pared gains to trade little changed. The krone has appreciated against all its 16 major counterparts in the past month as stronger oil prices boosted demand for Norwegian assets.
“What we saw in euro-krone this morning was stop-loss driven,” said Richard Falkenhall, a currency strategist at SEB in Stockholm, referring to levels where investors close trades to limit losses. “A lot of people expected some slowdown in the move lower in euro-krone.’
The krone traded at 7.5007 per euro at 4:44 p.m. in London after jumping to 7.4371 at about 9:54 a.m., the highest since January 2003. The currency climbed 0.3 percent to 5.6361 per dollar, after reaching 5.5816, the strongest level since Nov. 8.
Brent crude rose as much as 1.5 percent to $124.50 a barrel, before settling at $122.61. Norway is the world’s seventh-biggest oil exporter.
“If we see a stronger level from here, it may have an impact on the Norges Bank’s monetary policy, and they will express it, which should slow down the move,” Falkenhall said.
To contact the reporter on this story: Keith Jenkins in London at Kjenkins3@bloomberg.net
To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net
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