Norway may become Europe’s next investor haven as the region’s fiscal turmoil raises the appeal of debt and currency markets in an economy with the world’s smallest default-risk.
Sweden’s krona declined to the weakest level in almost two years against the euro amid speculation the nation’s central bank will cut interest rates at least once this year, damping demand for the currency.
Sweden’s krona rose to the strongest in 21 months against the euro after China signaled an end to the yuan’s peg to the U.S. dollar, boosting demand for currencies benefiting from the global recovery.
Norway’s krone slumped to its lowest level against Sweden’s currency in almost nine years as interest rate prospects in the two largest Nordic economies diverge.
Sweden’s krona, which is up about 30 percent against the dollar in the past year, is only “starting to approach” a level that can be deemed “reasonable,” central bank Deputy Governor Lars Nyberg said.
"A general diminishing appetite for foreigners to hold Norwegian assets is my main explanation."
- Carl Hammer on Dec 16, 2014