- Norges Bank leaves main rate at 0.5%, as forecast by analysts
- Officials plan to deliver less easing as oil rallies
Norway’s krone climbed to the strongest level in more than a week versus the euro as officials, encouraged by a recovery in oil, raised the outlook for interest rates in western Europe’s biggest petroleum producer.
The currency advanced against all of its 16 major peers as Norges Bank left the main rate unchanged at 0.5 percent, as predicted by economists surveyed by Bloomberg, while signaling it intends to deliver less monetary stimulus.
Officials said there’s still a chance they may need to cut borrowing costs, which have fallen from 1.5 percent in October 2014, once more this year. Easing tends to weaken a currency by increasing the money supply.
The message from Norges Bank “sounds quite positive,” said John Hardy, the Hellerup, Denmark-based head of foreign-exchange strategy at Saxo Bank A/S, citing positive references to the labor market as well as the rates outlook. “With markets positive, lower odds of that last rate cut coming into play feeds the krone strength amid a bump in short yields in anticipation of a less dovish central bank.”
The krone gained 0.7 percent to 9.3010 per euro as of 11:40 a.m. in London, after touching the strongest level since June 13. It advanced 1.5 percent to 8.1644 to the dollar.
Norway’s currency has risen more than 7 percent versus the greenback and about 3 percent against the euro since Brent crude oil starting rallying from a 12-year low on Jan. 20.