Norwegian krone at its strongest level since the spring
The Norwegian krone is at its strongest against the euro since April this year. However, the currency still remains weak compared to a year ago.
Norway's krone has been strengthening this week following the release of figures which show inflation in Norway is still high.
The figures from national data agency Statistics Norway showed that inflation in Norway is at 6.4 percent, well above the central bank target of two percent.
"People in the currency market have raised their eyebrows because inflation is higher than Norges Bank envisioned," currency strategist at Nordea, Dane Cekov, told business news site E24.
On Wednesday morning, one euro was trading for 11:36 kroner, the strongest the krone has been since mid-April. This time last year, one euro was trading for 10:29 kroner.
High inflation figures have boosted the krone as it could act as an indicator that the central bank, Norges Bank, will continue to raise interest rates.
"The market sentiment is that Norges Bank cannot be on the lazy side going forward, and then that gives the krone some support," currency strategist Nils Kristian Knudsen at Handelsbanken told E24.
Interest rates strengthen the krone as they make the currency more attractive to investors. High-interest rates can indicate a high return on investments.
On the flip side, lower interest rates in Norway than in other countries are seen as a contributor to a historically low krone.
In a recent interview with The Local, Dane Cekov said that energy prices and interest rates would need to rise to boost Norway's struggling currency.
"The Norwegian krone will likely remain under pressure in the time ahead. For it to strengthen, energy prices would need to rise, and Norway would need to have higher interest rates compared to other developed economies," Cekov said.
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Norway's krone has been strengthening this week following the release of figures which show inflation in Norway is still high.
The figures from national data agency Statistics Norway showed that inflation in Norway is at 6.4 percent, well above the central bank target of two percent.
"People in the currency market have raised their eyebrows because inflation is higher than Norges Bank envisioned," currency strategist at Nordea, Dane Cekov, told business news site E24.
On Wednesday morning, one euro was trading for 11:36 kroner, the strongest the krone has been since mid-April. This time last year, one euro was trading for 10:29 kroner.
High inflation figures have boosted the krone as it could act as an indicator that the central bank, Norges Bank, will continue to raise interest rates.
"The market sentiment is that Norges Bank cannot be on the lazy side going forward, and then that gives the krone some support," currency strategist Nils Kristian Knudsen at Handelsbanken told E24.
Interest rates strengthen the krone as they make the currency more attractive to investors. High-interest rates can indicate a high return on investments.
On the flip side, lower interest rates in Norway than in other countries are seen as a contributor to a historically low krone.
In a recent interview with The Local, Dane Cekov said that energy prices and interest rates would need to rise to boost Norway's struggling currency.
"The Norwegian krone will likely remain under pressure in the time ahead. For it to strengthen, energy prices would need to rise, and Norway would need to have higher interest rates compared to other developed economies," Cekov said.
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