Norway’s krone gained for a second day after a report showed inflation accelerated more than estimated in June, cooling speculation of further interest rate cuts.
The krone climbed as much as 1.4 percent and traded 0.6 percent higher at 8.89317 per euro as of 10:59 a.m. in Oslo.
A report showed underlying consumer prices rose an annual 3.2 percent in June, surpassing the 2.4 percent estimated in a survey of analysts. Norway’s central bank, which targets inflation of 2.5 percent, last month cut interest rates to a record low of 1 percent to support economic growth and said it was prepared to ease again at its next meeting in September.
While Norway’s central bank may focus more on output and allow some inflation overshoot, “today’s data as a standalone damps probabilities that more than or even one cut will be delivered to year-end,” said Josh O’Byrne, a currency strategist at Citigroup, in a note.
Inflation jumped as airline ticket prices rose 18 percent and fuel costs gained 4.7 percent, according to Statistics Norway. Underlying price growth was the highest since June 2009.
“This sharp increase has to be viewed in conjunction with the time of measure, which was around the start of the school summer holiday,” the statistics office said.