The Norwegian krone and Swedish krona climbed against the dollar as speculation that European Union leaders are making progress on countering the region’s debt crisis spurred demand for higher-yielding assets.
The krone rose against all but one of 16 major currencies tracked by Bloomberg, while the krona gained versus 13 of 16 as investors shunned havens in favor of riskier assets. Equities advanced and German bunds fell as Italy announced a 30 billion-euro ($40 billion) austerity plan. German Chancellor Angela Merkel and French President Nicolas Sarkozy pushed to rewrite the EU’s governing treaties as a first step to ending the debt crisis before a European Union summit in Brussels this week.
“Expectations are obviously building ahead of the EU summit,” said Carl Hammer, chief foreign-exchange strategist at Stockholm-based SEB AG. “Given the market is expecting a pro-active solution the krona and krone are amongst those currencies that should benefit.”
The Norwegian krone strengthened 0.8 percent to 5.7459 against the dollar at 4:32 p.m. in London, and gained 0.3 percent to 7.7307 per euro. Sweden’s krona appreciated 0.5 percent against the dollar to 6.7211, and was little changed at 9.0411 per euro.
The Stoxx Europe 600 Index added 1 percent, while the Standard & Poor’s 500 index gained 1.6 percent.
Sarkozy told reporters in Paris today Europe’s two biggest countries agreed to back automatic penalties for deficit violators, a European monetary fund and monthly summit meetings. He said they aimed to reach consensus by March.