The Pound Sterling to Norwegian Krone exchange rate advanced to its best level since July 2009 on Monday as the Krone resumed its downward trajectory due to the publication of the latest Norwegian retail sales data.
Monday’s decline adds to the one witnessed last week as the Norwegian currency fell sharply after the nation’s Reserve Bank unexpectedly revised down its forecasts for economic growth and virtually ruled out any prospect for a rise in interest rates until the end of 2015.
Today’s data added to the Krone’s weakness after it showed that retail sales in the Scandinavian nation fell more-than-forecast in May.
According to the report released by Statistics Norway, retail sales fell to a seasonally adjusted annual rate figure of -0.9%. That figure is a sharp drop from the previous month’s figure of a rise of 0.5%. Analysts had been expecting sales to drop by -0.3% last month.
The Nordic currency depreciated by 0.6% to 8.4105 per Euro, after touching 8.4165, the currency pair’s weakest level recorded since February 10. It declined 0.5% to 6.1605 per US Dollar.
Norway’s currency has fallen by 2.4% over the past six months, making it the worst performer after the Swedish Krona.
Concerns are growing in Norway that the nation’s economy will come under threat from a decline in energy investment. Norway is the world’s third-largest exporter of natural gas and is the seventh largest oil exporter.
“At some point in the future, oil investments will come down from the present very high level and when that happens- and it will happen at some point- that will create big challenges for the Norwegian economy,” said Norway’s Central Bank governor Oystein Olsen.
Last week the Central Bank forecast that investment in the petroleum industry will decline by 10% in 2015.
The Krone was also under pressure from a drop in oil prices as continuing violence in Iraq failed to disrupt supplies.
The currency could claw back some ground if Tuesday’s Norwegian Manufacturing PMI data comes in positively.
Norwegian Krone Exchange Rate
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Norwegian Krone,
,US Dollar,0.1623,
Norwegian Krone,,British Pound,0.0955 ,
Norwegian Krone,,Euro,0.1189 ,
Norwegian Krone,,Canadian Dollar,0.1843 ,
Pound Sterling,,Norwegian Krone,10.4803 ,
Euro,,Norwegian Krone,8.4101 ,
[/table]
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