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Norway's currency weakens to record low against euro

Published 10/17/2019, 02:47 AM
Updated 10/17/2019, 02:47 AM
Norway's currency weakens to record low against euro

By Terje Solsvik

OSLO (Reuters) - Norway's currency weakened to an all-time low against the euro on Thursday, costing as much as 10.1800 crowns per euro at 0622 GMT and exceeding a previous record of 10.1700 set in December 2008, according to Refinitiv data.

Handelsbanken Markets said seasonal factors may have influenced trades since the start of October, as the crown in recent years has tended to weaken when global investors reduce their risk exposure toward year-end.

Some analysts blame the currency's recent weakness on global trade jitters, while others said the speed and magnitude of the drop were hard to explain.

"The continued sell-off in NOK (is) lacking any obvious fundamental drivers," DNB Markets, Norway's largest bank, wrote in a note to clients on Thursday.

A Reuters poll on Oct. 4 predicted a slight recovery for the crown in the next three months, to around 9.90 against the euro, and further gains to 9.60 a year from now.

The Norwegian central bank, which has raised interest rates four times in the last 13 months, said in September it no longer planned to hike, and a Reuters poll on Wednesday predicted monetary policy would be on hold for several years.

The crown averaged around 8.0 to the euro in the years from 2000-2013, but weakened sharply when the price of oil and gas, Norway's main exports, crashed in 2014.

The currency failed to regain its previous levels when the price of crude recovered, however, as investors instead picked safe-haven currencies at a time of geopolitical uncertainty.

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