The Norwegian krone has plummeted to an eight-month low against the euro, driven by a decline in oil prices and concerns that tariffs imposed by President Trump may trigger a global recession.
The krone’s poor performance over the past week has made it the worst-performing currency among the G-10 nations, according to a note by ING’s Chris Turner.
The depreciation of the krone has been significantly influenced by the falling oil prices, as Norway is a major oil exporter.
Additionally, the fact that the Norges Bank, Norway’s central bank, has not yet begun to cut interest rates is further pressuring the krone. Norwegian interest rates have some of the greatest potential to fall among global rates, adding to the currency’s vulnerability.
Another contributing factor is the decrease in liquidity. Turner noted that the krone tends to perform poorly in illiquid environments, which could be the case this week.
The euro, on the other hand, has appreciated by 1.3%, reaching a high of 12.0418 krone, as per data from FactSet. The shift in currency values continues to reflect the ongoing global economic uncertainties and the impact of fluctuating oil prices on oil-dependent economies.
