The Norwegian Krone, generally considered a safe haven currency, earlier skidded to its lowest level in nearly 8 months versus the Euro. Earlier today, economic data showed that the Norwegian economy slowed in Q2 to 0.2%, which was generally in line with expectations; however, a downward revision in Q1 figures did take investors by surprise. The Krone’s depreciation, especially against the Euro, is being attributed to the steep drop in Oil prices. Oil is Norway’s primary export, and the fall in prices has tempered investment while pushing unemployment higher.
As reported at 11:26 am (BDT) in London, the EUR/NOK was trading at 9.2448 Krones, a gain of 0.20% but well off the session peak of 9.2737 Krones. The USD/NOK was lower at 8.2851 Krone, a loss of 0.13% for the Dollar. Expectations are that the Norwegian central bank is likely to move to a looser monetary policy.
Fed Minutes Disappoint Dollar Bulls
In the US, yesterday’s release of Fed minutes surprised some market players who had expectations that the FOMC would cement their view of an imminent rate hike. The Fed’s protocol suggested that while the economy was stabilizing, there were lingering concerns over inflation as well as the risks of a weak global economy which could not be ignored. The USD/JPY hit a 3-week trough as a result, with the pair trading at 123.68 Yen before later recovering to 124.0445 Yen, a gain of 0.12%.