Norway’s Krone Tumbles With Crude as Brexit Concern Escalates

  • Lower oil prices weighed on oil-producing nation’s currency
  • Central banks comments also adding to clamor for havens

The Norwegian krone fell the most in eight months, as oil prices tumbled during a rally in safe-haven assets that was spurred by investor concerns about a possible fracturing of the European Union by the U.K.

Norway’s krone declined versus all of its 16 major peers as lower crude prices weighed on the currency of the petroleum-producing nation. Investors are seeking relatively safer investments as speculation escalated that Britain will leave the EU after a vote next week, with recent polls mostly showing more support for the “Leave” camp.

Investor anxiety over central-bank policies is also adding to the clamor for havens. The Federal Reserve said on Wednesday that the referendum was among reasons to keep U.S. interest rates on hold. The Bank of England and the Swiss National Bank warned on Thursday about negative impacts of a Brexit to Europe and global financial markets.

“Increased uncertainty is always a handicap for less-liquid currencies,” said Carl Hammer, chief currency strategist at SEB AB in Stockholm. “Scandies are highly correlated to risk appetite at the moment. I think this comes on the back of previous long positioning in both and that everyone seems to be scaling down on risk as the probability for a Brexit. ”

Norway’s currency weakened 1.8 percent to 8.4623 to the dollar as of 5:05 p.m. in London, set for its biggest decline since September 2015. It depreciated 0.4 percent to 9.3978 to the euro.

    Before it's here, it's on the Bloomberg Terminal. LEARN MORE