In the past month, foreign currency became weaker, especially the dollar. Experts predict that the krone will stay strong,and will get stronger towards the end of the year.
‘We believe this level will last in the near future, and in the autumn, and near Christmas, the krone will strengthen even further’, said Magne Østnor, currency strategist at DNB Bank, to NTB news agency.
–
On May the 10th this year, Norges Bank’s dollar price was NOK 8.68. In recent days, the price has dropped to just under 8 kroner for one dollar, the first time since 2015 that the US dollar has been so cheap compared against the Norwegian krone. Euro, Swedish and Danish kroner have also been cheaper in the past month.
–
Favourable for Christmas shopping
‘We believe this will continue, and that the krone will get stronger, but perhaps not immediately,’ said Østnor.
Kjetil Olsen, the chief economist at Nordea bank, agreed with Østnor.
–
‘We are quite stubborn in holding to the belief that the krone exchange rate will continue, especially against the euro,’ said Olsen.
He also believes the krone will strengthen against the dollar, but it may take a little longer.
–
‘Looking a year ahead, we’ll have a stronger kroner against the dollar, and if the price stays as it is now, it will be much better to go Christmas shopping in the USA this year than last,’ said Olsen.
–
Currency speculators influenced the course of events
This spring, the krone weakened considerably, so foreign currency became more expensive. Østnor believes that the dumped krone is now now about to get out of that situation.
–
‘One reason why the krone went so low is that currency speculators had hoped for a strong krone exchange rate, and when the economy did not progress as well as they had hoped, they increased the velocity of the fall by selling out’, according to DNB’s currency strategist.
–
‘There were big speculators in the picture, who shifted the krone exchange rate. They are now sitting on the fence a bit,’ said Østnor.
–
Since oil prices have gone up and down in the past month, Østnor believes that it’s only very recently that increased oil prices have led to an increase in the krone exchange rate.
–
© NTB Scanpix / Norway Today
