While the Euro has proved remarkably resilient in the wake of anti-austerity Party Syriza’s Greek election victory, the common currency softened against the Norwegian Krone today following comments issued by Norges Bank.
The Euro dipped from 8.87 Kroner to 8.81 Kroner after the Norwegian central bank asserted that it intends to increase the amount of domestic currency it purchases on behalf of the nation’s sovereign-wealth fund.
Norges Bank intimated that in February it will begin selling (in foreign exchange terms) the equivalent of 700 million Kroner a day.
The action comes as the Norwegian Krone remains under considerable pressure as a result of sliding oil prices and reduced domestic output.
Norway’s oil industry became considerably less lucrative over the course of 2014 as the price of oil tumbled by more than 50% in response to an excess in global supply. The nation’s oil output over the course of last year was also half that recorded when production was at its peak in 2010.
After fluctuating within a fairly narrow range for the first three quarters of 2014, the Euro to Norwegian Krone exchange rate advanced from a low of 8.09 to a high of 9.30.
However, the Swiss National Bank’s (SNB) scrapping of its Euro cap and the European Central Bank’s (ECB) introduction of quantitative easing measures has since seen the EUR/NOK pairing return to trending in the region of 8.72.
The Krone could extend today’s gains against the Euro next week if the Greek bailout negotiations deteriorate or economic reports for the Eurozone print poorly.
Norwegian data to be aware of includes the nation’s NIMA Manufacturing PMI for January (set for publication on Monday) and Industrial/Manufacturing production figures, due out at the tail end of next week.
Today the Euro to Norwegian Krone (EUR/NOK) exchange rate has moved between highs of 8.87 and lows of 8.72.