Norway’s krone hit its lowest level since the 2008 financial crisis as global trade tensions drive down the price of oil, threatening large parts of the Norwegian economy.
The krone touched 10.097 per euro on Wednesday in Oslo, its weakest point since December 2008.
The price of Brent crude has plunged about 12 per cent since US President Donald Trump last week ratcheted up his trade dispute with China, which then retaliated. The dispute is hurting global growth and demand for commodities. Norway is Western Europe’s biggest producer of petroleum products and gets almost half its goods exports from oil and natural gas.
“The obvious culprit today is the renewed slide in oil prices,” said Andreas Steno Larsen, a currency strategist at Nordea Bank. “There’s basically thin air above technically, which leaves NOK at risk ahead of the important CPI number.”
The trade turmoil comes as Norway’s central bank prepares for an interest rate announcement on Aug 15. The bank has signaled it’s prepared to hike again as soon as September. Governor Oystein Olsen has surprised markets with his commitment to tightening. In June, he raised the key rate for a third time in less than a year.