(Bloomberg) -- Norway’s krone surged to its strongest level this year against the euro after the nation’s central bank refrained from cutting interest rates and hinted at moving away from an easing bias.
The currency appreciated at least 1 percent against all of its Group-of-10 peers after the Norges Bank held its main rate at record-low 0.5 percent. The decision was forecast by 15 of 22 analyst surveyed by Bloomberg, with the rest expecting a quarter-point cut. The Oslo-based central bank raised its outlook for its rate as key economic indicators have signaled that the worst may be over for Norway’s economy, which bore the brunt of a slump in oil prices earlier this year.
“The market was surprised that it has changed its stance to a more neutral one, which is obviously quite positive for the Norwegian krone,” said Thu Lan Nguyen, a currency strategist at Commerzbank AG in Frankfurt, referring to the Norges Bank. The appreciation in the krone is “sustainable so we will keep at these levels. It’s justified in light of this significant turnaround in the Norges Bank’s stance."
The krone gained 1.2 percent to 9.1318 per euro as of 10:20 a.m. London time, after reaching 9.1223, its strongest since Dec. 2. Norway’s currency climbed 1.6 percent against the dollar to 8.1321.