Left Menu
Development News Edition

FOREX-Norway's crown slides to 17-year low, euro drops on rate expectations

Reuters | Oslo | Updated: 16-08-2019 17:06 IST | Created: 16-08-2019 17:04 IST
FOREX-Norway's crown slides to 17-year low, euro drops on rate expectations
Image Credit: business24-7.ae

The dollar rallied on Friday, hitting a two-week high against the euro and reaching its strongest in more than 17 years against the Norwegian crown as expectations for lower interest rates weighed on the European currencies.

The euro fell to $1.1073, within a whisker of the two-year low it reached at the beginning of August. The biggest move, however, was in Norway's crown, which dropped to more than a 17-year low of 9.0390 against the greenback in early Friday trading. Better-than-expected retail sales data in the United States on Thursday also encouraged buying of the dollar.

The crown extended its selloff after the Norges Bank said on Thursday its plan for an interest rate rise this year was now more uncertain. Norway's currency has been falling fast since June as the price of oil - its principal export - has tumbled and as fears of weaker global growth and tougher trade relations weighed down on the open Norwegian economy. Trade tensions between the United States and China intensified last week after President Donald Trump warned he will be raising tariffs on additional Chinese imports this year.

The crown later rebounded and was last up 0.3% at 8.991. Against the euro, the crown rose 0.6% to 9.9655. Earlier this month the crown dropped to a near 11-year low versus the euro. "There's no good reason to be super bullish on the Norwegian crown," said Lauri Halikka, a fixed income and foreign exchange strategist at Nordic bank SEB.

The euro fell on Friday due to growing expectations of an interest rate cut by the European Central Bank after Governing Council member Olli Rehn suggested on Thursday that the central bank could restart its quantitaive easing program and was open to extending it into equity purchases. "For the markets, this came as a surprise," said Ulrich Leuchtmann, an analyst at Commerzbank. However, the euro is unlikely to sink much further on this reason, Leuchtmann said.

"ECB-induced euro weakness will be relatively limited (because) if Europe's common currency would weaken too much, the U.S. government's pressure on the Fed (to weaken the dollar) could intensify." Measured against a basket of six major currencies, the dollar was higher by 0.1% at 98.266. It has recovered by 1.3% from its three-week low on Aug. 9.

Data showing U.S. consumers kept spending in July came as a relief after the U.S. Treasury yield curve inverted this week, which historically has preceded U.S. recessions. The inversion stoked worries about the impact of the Sino-U.S. trade war. The curve steepened a little on Friday.

China on Thursday said it would retaliate for the latest U.S. tariffs on $300 billion of Chinese goods, but Trump said any pact would have to be on America's terms, suggesting a resolution to the trade war remains elusive. China's offshore yuan, whose plunge past 7 to the dollar last week sent shivers through financial markets, was weaker on Friday at 7.0530. The People's Bank of China fixed the onshore yuan currency at 7.0312 on Friday, compared with market expectations at 7.0307, according to analysts at Commerzbank.

Sterling was up 0.7% at $1.2160, after reaching an eight-day high of $1.2169 earlier. Against the euro, the pound reached a two-week high of 91.94 pence.

Also Read: Mass training camps in Xinjiang eliminated religious extremism: China



Post-COVID-19 Nigeria needs a robust Health Management Information System to handle high disease burden

Nigeria is among a few countries that conceptualised a health management information system HMIS in the early 90s but implementation has been a challenge till date. Besides COVID-19, the country has a huge burden of communicable and non-com...

Morocco COVID-19 response: A fragile health system and the deteriorating situation

Learning from its European neighbors, Morocco imposed drastic measures from the initial stages of the COVID-19 outbreak to try to contain its spread. The strategy worked for a few months but the cases have surged after mid-June. In this sit...

COVID-19: Argentina’s health system inefficiencies exaggerate flaws of health information system

You can recover from a drop in the GDP, but you cant recover from death, was the straightforward mindset of Argentinas President Alberto Fernndez and defined the countrys response to COVID-19. The South American nation imposed a strict...

Rwanda’s COVID-19 response commendable but health information system needs improvement

Rwanda is consistently working to improve its health information system from many years. However, it is primarily dependent on the collection and reporting of health data on a monthly basis. Besides, evaluation studies on Rwandas HIS publis...


Latest News

Free grocery kits to continue for another four months:Kerala CM

Kerala Chief Minister Pinarayi Vijayan on Thursday said the distribution of the free grocery kits will continue for another four months and said no one in the State should go hungry during the COVID-19 crisis. The Chief Minister inaugurated...

NIA conducts searches at 30 locations in Bengaluru in connection with recent violence there; says key conspirator arrested.

NIA conducts searches at 30 locations in Bengaluru in connection with recent violence there says key conspirator arrested....

Portrait by Renaissance master expected to soar past $80M

An enigmatic painting from Renaissance master Sandro Botticelli will go on auction next year and art watchers will be seeing if it fetches more than its eye-watering 80 million estimate, despite the pandemic. Botticellis 15th-century portra...

Soccer-UEFA, Hungary to evaluate together Super Cup's health impact amid COVID-19

Hungary and UEFA will review the health impact of the Super Cup, Europes first major game open to fans amid the COVID-19 pandemic, to see if international matches can be held safely, the president of European soccers governing body said on ...

Give Feedback