Kjersti Haugland, chief economist at Norway’s biggest bank DNB ASA, said she doesn’t expect the adverse affects of COVID-19 to trigger any Norwegian rate cuts in 2020. But Economists at Goldman Sachs thinks because all the other central banks around the world are cutting rates, Norway won’t be far behind.
Norway’s currency is called the Norwegian Kroner. And it’s a commodity currency. A commodity currency is a name given to currencies of countries which depend on the export of certain raw materials for income. The major currencies that are considered “commodity currencies” are the Australian dollar, Canadian dollar, and New Zealand dollar.
Because Norway has a pretty big oil reserve and has one of the world’s biggest wealth fund and has never resorted to negative rates or quantitative easing. But than oil dropped 30% over the weekend.
The central bank of western Europe’s biggest oil nation is expected to resort to an interest rate cut as early as next week, reversing a recent tightening cycle.
The oil-price crash has totally upended all bets surrounding Norway’s monetary policy, forcing economists to eject their latest forecasts. Norges Bank announces its next rate decision on March 19, with Deutsche Bank and Swedbank now advising clients to brace for a possible half-point cut from 1.5%. Governor Oystein Olsen said the bank is “monitoring the situation,” in an emailed response to questions.
Oil and gas account for more than a third of Norway’s exports and a fifth of state revenues. After benchmark Brent crude fell as much as 31% on Monday, the most in almost 30 years, Norway’s krone sank 5.1% against the euro, sending it into uncharted territory.
So where is the Kroner heading against the US dollar, lets go to the charts?
Monthly Chart (Curve Time Frame) - there is no monthly supply and the monthly demand is at 8.47500.
Weekly Chart (Trend Time Frame) – the trend is up.
Daily Chart (Entry Time Frame) – the chart suggests to long on a pull back to one of the the daily demand zones.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
Posted via Steemleo