Published: 24 Oct at 1 PM Tags: Euro, Dollar, America, Eurozone, USA, Germany, Norway,
During European trading Norges Bank’s decision to leave rates unaltered in the face of weak inflation helped the Krone advance on the several of its most traded peers.
The Norwegian currency advanced on the Euro and US Dollar as the central bank restated its commitment to keeping interest rates low until mid-2014.
In a statement accompanying the decision Norges Bank Governor Oystein Olsen commented; ‘Inflation in September was lower than expected, but at the same time the [Krone] has depreciated since the previous monetary policy meeting. In other respects, economic developments both in Norway
and abroad have been broadly in line with expectations.’
While the Krone rallied to a high of 8.1390 against the Euro in response to the assertion, the Crown currency also advanced to a month-high against the US Dollar ahead of today’s US initial jobless claims report.
The Krone is currently trading against the US Dollar in the region of 5.9140.
According to one Swedbank economist Norges Bank is unlikely to increase rates until ‘the fourth quarter of 2014 or the first quarter in 2015. The housing market is a big uncertainty as prices remain flat, and if they fall, the bank will not hike.’
In other currency news, the Euro rallied to a two-year high against the US Dollar in spite of some less-than-spectacular PMI reports for the Eurozone.
The services sector of both the currency bloc and its largest economy expanded by less than forecast in October and Eurozone manufacturing PMI also came in below estimates. These lacklustre results were slightly offset by the news that Spanish unemployment unexpectedly declined while the German manufacturing sector expanded by more than anticipated.
After the data was released the Euro fluctuated and currency strategist Jane Foley stated; ‘This data is a wakeup call, showing that there are events that can still knock the Euro. We’ve seen the Euro push higher on the back of Dollar weakness and the Dollar will remain on the back foot, so the fall in the Euro will probably be limited’.
With US initial jobless claims data expected to show an increase in applications for unemployment benefit additional market movement can be expected in the hours ahead.
As of Thursday, 24th October 2013, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.1739, GBP USD exchange rate was 1.6198, and GBP NOK exchange rate was 9.5509.