– This has come as a surprise to me, says senior strategist at Nordea Markets, Dane Cekov. The Norwegian krone has been in free fall for the past six months. There has been a lot of uncertainty in Europe, the European Central Bank has had frequent and rapid interest rate hikes and the price of oil has fallen. All of this has probably had an effect on the fact that we have had the weakest krone ever in the last six months. But now we can see an improvement. And it is, among other things, positive for Norwegians who have chosen a late holiday this summer. Because since 30 May, the Norwegian krone has strengthened by around 7 per cent against the euro. Then one euro cost NOK 12. – Still more expensive than last year When Emilie Christensen from Stavanger and her group of friends went on holiday to Italy, the exchange rate was 11.66 euros. On Friday it is down to 11.16. – I followed the course a bit before we left. I felt a bit of stress that it had become so high, but the fact that it has now become lower is good. But it is still more expensive than it was last year, she says. Emilie Christensen and her friends on a trip to the Cinque Terre in Italy. Photo: Privat She and her friends from Stavanger are in one of the five Cinque Terre cities on Friday. There they have sat down in a cafe and ordered an Aperol Spritz. Because even though it is still expensive in Italy, the friends agree that if they are on holiday, they are on holiday. – I think everyone in our group of friends agrees that we should enjoy ourselves when we first go on holiday. But we are not going to do the big bag shopping, she says. Currency analyst Nils Kristian Knudsen at Handelsbanken. Photo: Handelsbanken Increased interest rate leads to stronger krone Since the last interest rate hike by Norges Bank, the market participants in the interest rate market are waiting for Norges Bank to raise the key interest rate to 4.5 per cent towards the New Year. According to Nils Kristian Knudsen, interest rate and currency strategist at Handelsbanken, this means that the signals from Norges Bank that inflation here at home is far too high are perceived as credible. And that a higher policy rate is what is needed to reduce price inflation. – Today’s situation means that expectations of a further rise in the key interest rate here at home are strengthening the krona, says Knudsen. The Norwegian krone has strengthened by almost one krone against the euro in the past month. Photo: Illustration photo. In addition, Knudsen points out that a better mood in the financial markets has so far contributed to the Norwegian krone becoming more interesting to invest in. – Probably on the basis that many have seen the krone’s weakening as somewhat exaggerated, he believes. It may also be cheaper to visit England in the autumn. The rate of a British pound has fallen from 13.78 to 12.81 since the end of May. Expect interest rate peak in the USA And the US dollar has now fallen by more than 11 per cent, from NOK 11.18 on 30 May to being below NOK 10 on Thursday. That is not accidental, according to currency expert Knudsen at Handelsbanken. – The fact that the US dollar has weakened most has to do with the fact that the interest rate peak in the US is close. Lower inflation than expected in June accelerated the dollar’s weakening, he says. Dane Cekov in Nordea explains the strengthening by the fact that inflation in the USA and several other countries has been below expectations, while price growth in Norway is faster than expected. – This means that expectations of interest rate increases abroad have stagnated, while expectations in Norway have increased. In addition, he points out that the price of oil has risen in recent weeks, and that China has struggled to recover following the reopening of the country earlier this year, which leads to a strengthening of the krona. Senior strategist at Nordea Markets, Dane Cekov. And then it has become a little nicer to be Norwegian in Denmark. One Danish krone now costs 1.50 Norwegian kroner, compared to 1.61 in May. – Many are probably still very unsure of how this will look in the future. When it is as weak as it is without major problems in the Norwegian economy, it has room to strengthen. It has done that, and can also strengthen itself even more, says chief economist at Sparebank 1 SR-Bank, Kyrre Knudsen. Chief economist at Sparebank 1 SR-Bank, Kyrre Knudsen. Photo: Ole Andreas Bø / news Expect fluctuations Both Cekov in Nordea and Knudsen in Handelsbanken expect that in the future we will see that the krone can fluctuate a lot in value. One of the reasons for this is that the mood and themes in the interest rate and currency markets are constantly changing. – The krona can still strengthen from today’s levels, but then we are probably dependent on the financial markets eventually pricing in even less likelihood of a decline in the US, and global growth eventually picking up more, he says.
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Good news for Southern tourists – the krona is about to strengthen – news Rogaland – Local news, TV and radio
