Amid the mixed results of the US dollar against most of its currency rivals, the Scandinavian kroner have actually given up ground versus their American currency counterpart.
Plummeting Crude Oil prices have gouged the value of the Norwegian krone (NOK) pushing the USD/NOK from 5.68 on Feb. 1st towards 5.80 yesterday before meeting resistance and settling near 5.76 in today’s early European trading hours.
Feeding into the NOK’s price slump was a depressed reading from the Norwegian manufacturing sector which shrank 1.0% in December. Average forecasts had Norway’s manufacturing sector experiencing approximately 0.5% growth. The worse-than-expected data weighed on the krone these last few days.
Sweden’s krona (SEK) has fared somewhat better against the US dollar, but its recent appreciation has begun to cut into Swedish corporate profits. TeliaSonera (TLSN), as one example, reported earning losses due to the strengthening SEK, and many analysts have begun to forecast a decline in corporate revenue in 2011 due to the krona’s recent record highs.
Overall, the Scandinavian currencies fell weak against the USD these past several trading days, as did most of the other global currencies. Sweden and Denmark were able to begin paring those losses as of yesterday’s trading due to the respective power of their economies. Norway, on the other hand, has fared worse due to the falling price of Crude Oil.
The SEK and DKK should continue to pare last week’s late losses, but the NOK appears poised to continue losing alongside the movement of oil prices.
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Greg Holden is the Chief Market Analyst at ForexYard. Greg uses his detailed knowledge of fundamental and technical analysis to provide some of the leading market forecasts in the forex world today. A guest lecturer at forex symposiums and Chief Editor of ForexYard's analysis center, Greg brings highly detailed and easy-to-use market analyses to his clientele. He has been published on ForexYard's Trading Blog and affiliate websites. Greg holds degrees in Political Science and Economics from Missouri State University, as well as a Masters degree in Middle Eastern History.
