Norwegian Krone to Dollar Exchange Rate (NOK/USD) Biggest Fall in 21 Years; Gold Price Down 5%

June 24, 2013 - Written by David Woodsmith

STORY LINK Norwegian Krone to Dollar Exchange Rate (NOK/USD) Biggest Fall in 21 Years; Gold Price Down 5%

Last week brought major volatility for almost all of the world’s major global currencies, with the US Dollar posting pronounced gains against the majority of the other sixteen most-actively traded tenders, while the high-yielding commodity dollars gave up ground. The reasons for this paradigm shift have been well documented – in short, Wednesday’s pre-announcement by the US Federal Reserve that it is set to begin trimming its controversial Quantitative Easing programme before the end of the year caused appetite for risk to drain from the market.

One currency suffered more than any other during the week, yet relatively little has been written about it. The Norwegian Krone (Currency:NOK) got absolutely smashed, losing the most ground against the US Dollar (NOK/USD) during a weekly session for some 21 years. The Norwegian economy is heavily dependent on the export of crude oil, so the sharp downward movement in the wholesale price of commodities in general which followed the Fed’s midweek announcement hurt the Krone badly. However, there was more behind the pronounced decline in the value of the Norwegian tender than just fears regarding the continuing strength of demand for the nation’s shipments of black gold; Thursday’s announcement by the Nordic state’s central bank that it is set to trim its key lending rate within the next 12 months added to downside pressure on the NOK. The news for the Norges Bank sent the euro to Norwegian Krone exchange rate (currency : EUR NOK) back above the eight to one level for the first time since Christmas 2010.

The Norwegian Krone to Dollar Exchange Rate (NOK/USD) is currently trading at 1 NOK = 0.1646 USD.

Elsewhere, one commodity which traditionally performs well during times of stress amongst investors pointedly failed to shine last week. The gold price dropped by some 5% on Wednesday, showing that it really is just another commodity after all.

Looking ahead to this week, tomorrow afternoon’s Durable Goods Orders data and Consumer Confidence survey in the US have the potential to move the market. A strong showing from both / either will stoke market rumours that the Fed may begin trimming QE as soon as next month, favouring the US Dollar.

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