Norway’s Krone Beats G-10 Peers as Economy Starts Growing Againby
Norges Bank holds interest rates at record-low 0.5 percent
Currency strengthens the most in two months versus euro
Norway’s krone was the best-performing Group-of-10 currency after data showed the economy returned to growth in the first quarter and the nation’s central bank decided not to increase monetary stimulus.
The currency was also supported as oil prices climbed for a third day. That’s a boon to a nation that’s been spending its wealth -- acquired as western Europe’s biggest oil producer -- on trying to prevent the economy from slipping into a recession.
Mainland gross domestic product grew 0.3 percent in the first quarter -- better than economists predicted and after a revised 0.1 percent contraction in the previous three months. Norges Bank kept its benchmark rate at a record-low 0.5 percent following a quarter-point cut in March.
“Part of the reaction was probably to do with the GDP number,” said Richard Falkenhall, a currency strategist at SEB AB in Stockholm. “The rate announcement itself was not a surprise. Oil prices, of course, contributed on the margin.”
The krone jumped 0.9 percent to 9.2440 per euro as of 12:25 p.m. London time in the biggest advance since March 11. It gained 0.7 percent to 8.1113 to the dollar.
Norway’s currency will strengthen to 9.17 per euro by year-end, according to the median estimate of strategists surveyed by Bloomberg.