Norwegian Krone Rebounds as Consumer Prices Increase


Dec. 11 2015, Published 4:48 p.m. ET

Rebound in the Norwegian krone

The Norwegian krone gained versus the US dollar on December 10, 2015, due to higher inflation numbers for November. The recent slump in oil prices has been weighing on the Norwegian krone, as it is a commodity currency. The interest rate decision by Norges Bank is expected to come on December 17, 2015, which will guide volatility in the Norwegian krone. The benchmark rate is currently at a record low of 0.75% as low commodity prices have taken a toll on the Norwegian economy and slowed growth metrics.

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Inflation exceeds forecasts in November

On an annual basis, consumer prices hit the highest level since September 2013 releasing at 2.8% for the month of November in comparison to 2.5% in October and growth expectations of 2.6%. On a monthly basis, inflation levels mirrored the previous month’s growth to increase by 0.4% in November, exceeding forecasts of a 0.2% rise. Core inflation was also consistent with the previous month to release at 0.2% for November against estimates of flat growth. The decline in producer prices at 6.4% was less in November on an annual basis against a decrease of 9.4% in the previous month.

Impact on the market

Looking at the movement in ETFs, the iShares MSCI Norway Capped ETF (ENOR) extended its gain on December 10 with a rise of 0.30%. The WisdomTree Europe Hedged Equity ETF (HEDJ) was also trading on a positive bias and rose 0.39%.

Among the Norwegian ADRs (American depositary receipts), petroleum company Statoil ASA (STO) fell 0.28% while fishery major Marine Harvest (MHG) fell by 0.46%. On the other hand, Finnish company Nokia Oyj (NOK) ended on a negative note by 0.71%.


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