The krone has depreciated 0.6 percent against the Euro since Friday. The reason is oil price declines and fears in the Chinese coronavirus markets, according to analysts.
Both DNB and Nordea described the phenomena in their morning reports on Monday.
The markets fear that the virus will affect the economy negatively, and the headlines about the increase in the number of infected and dead by the Chinese virus, are enough for investors to sell off risky securities. On top of that, the (burned) oil price dropped to around $ 59.4 on Monday morning.
– Risk aversion in the market is bad news for the Norwegian krone, which stood at NOK 10 against one Euro this morning, writes analyst Joachim Bernhardsen in the Nordea market’s morning report.
The Norwegian krone is a very small currency, and it is considered very uncertain. When there is turmoil and fear in the markets, investors often do not want to buy Norwegian kroner and then the currency becomes less worthwhile.
In 2019, the Norwegian krone was at a record low, and Norges Bank has predicted that it will continue to be weak for the next few years due to international uncertainty.
Virus fears have hit the Asian stock exchanges. On Monday, the Nikkei 225 in Japan fell by more than 2 percent. The Japanese yen, seen as a safe currency, has strengthened. The Chinese markets are closed in connection with the celebration of Chinese New Year.
© NTB Scanpix / #Norway Today
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