OSLO: The currencies of Norway and Sweden reached multi-year lows against the euro on Wednesday and approached levels not seen since the 2008 financial crisis, due to a combination of weak domestic data and somewhat lower crude prices.
The Norwegian crown reached a three-year record low of 9.7995 on Wednesday and approaching a level not seen since December 2008.
The Swedish crown meanwhile hit 9.9929 against the euro, its lowest level since November 2016 and approaching levels last seen seven years ago.
The currencies strengthened somewhat later in the session and were trading at 9.7225 and 9.9365 at 1419 GMT, respectively.
“Yesterday we had weak inflation and housing prices from Sweden. A meltdown of the housing market is also a concern here in Norway, and the Norwegian crown was probably pulled down along with the Swedish crown,” said Frank Jullum, a chief economist at Danske Bank, who is based in Oslo.
“We also had some weak data from China yesterday which has contributed to the “risk-off sentiment” in all commodity-related currencies,” he added.
Oil and gas is Norway’s biggest exports and so oil prices weigh on the currency.
Data in Norway and Sweden show house prices have dipped after years of rises, with some analysts concerned that plans for tighter mortgage regulations in Sweden could lead to much larger falls.
In neighbouring Norway, sales for new homes so far this year were down 21 percent from last year and the fall has accelerated in recent months.
Source: Brecorder.com
