As a commodity-correlated currency, the Norwegian Krone was supported by the news that oil prices continued their advance on Tuesday.
Reports of output being cut saw Brent crude oil appreciate by 1.3% a barrel, with the asset briefly achieving 55 US Dollars before edging back to 53.65. Meanwhile, the price of US oil increased to 48.52 US Dollars, rising 1.7%.
Data revealed that demand for the lease of oil rigs in the US is slowing, leading some industry experts to bet that production levels might start to slide.
An easing in supply would help to erode the global oil surplus and could mark the end of the commodity’s extensive downtrend.
The development bolstered demand for the Krone and the Norwegian currency gained by around 0.7% against the Pound despite Sterling deriving support from a stronger-than-anticipated UK Construction PMI.
This followed the impressive 1.6% advance recorded by the Krone on Monday.
The Pound Sterling to Norwegian Krone (GBP/NOK) exchange rate fell to a low of 11.3929 during the European session.
Meanwhile, the US Dollar to Norwegian Krone (USD/NOK) exchange rate slumped from a high of 7.6635 to trade in the region of 7.5612.
If oil prices continue to strengthen, the Norwegian Krone could consolidate and extend gains in the days and weeks ahead.
As Norwegian data is lacking until the end of the week, movement in the commodity market and global economic developments will be responsible for any Krone volatility experienced over the next couple of days.
A final flurry of Norwegian Krone movement could occur before the weekend as Norway publishes Industrial Production and Manufacturing Production data for December.
Industrial production in the nation is believed to have increased by 0.84% on the month following November’s 1.9% increase. Economists have forecast that annual manufacturing production eased from 4.0% to 3.41% at the close of last year.
Below estimate results could be Kroner negative.