July 8 (Bloomberg) -- Norway’s krone advanced by the most in 10 months against the dollar as higher stocks in Europe boosted demand for the currency amid bets its slide to an almost three-year low was excessive.
The krone appreciated the most against the dollar among the greenback’s 16 major counterparts. The Stoxx Europe 600 Index rose 1.4 percent, giving investors the confidence to buy higher-yielding assets. The krone surged more than 1 percent against the Swedish krona after a report showed Sweden’s manufacturing slump deepened.
“The selling of the krone has been overdone, so in the near term and next three months we expect a correction toward more moderate levels,” said Ole Kjennerud, an economist at DNB ASA in Oslo. “It’s going to be volatile over the next week, but the movement should go toward somewhat stronger krone.”
Norway’s currency climbed 1.8 percent to 6.1417 per dollar at 4:35 p.m. London time, the biggest gain since Sept. 7. It earlier depreciated to 6.2720 per dollar, the weakest since Sept. 1, 2010. The krone gained 1.4 percent to 7.9063 per euro.
Sweden’s krona rose 0.4 percent to 6.7768 per dollar.
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