Norway’s krone has been losing value against the US dollar during the past week, at odds with predictions earlier this summer. Analysts now blame uncertainty generated by US President Donald Trump’s trade wars, a stronger dollar and the summer holidays.
One US dollar cost NOK 8.23 on Wednesday afternoon, compared to just NOK 6 and even less just a few years ago. Currency analysts had expected Norway’s krone to be stronger than it is right now, predicting an exchange rate of NOK 7.77 in June.
Now they think the weakness is closely tied to increased uncertainty globally. It’s been more a matter of the US dollar strengthening than the krone weakening, given how it’s held up against other currencies.
Joachim Bernhardsen, an analyst at Nordea Markets, told newspaper Dagens Næringsliv (DN) this week, though, markets have been quiet during Norway’s summer holiday month of July, with fewer investors taking positions in it. “I think things will happen quite quickly from now on, and that we’ll see a more normal market during the next two weeks,” Bernhardsen told DN. He thinks the krone will also strengthen when the central bank meets again in September, when it’s expected to raise interest rates.