Several analyses reported on over the past week have generated a buzz around the Norwegian economy. One of the leading summations came from John Hydeskov, a leading analyst at Danske Bank A/S in London, who commented in an interview on Bloomberg TV, on his bank’s expectation to see double-digit growth in Norwegian trade.
The analysis included the recent rebound traders have witnessed in global stocks these past two trading days, highlighting a return to higher yielding assets while traders seek out stores of value to offset potential losses seen on Europe’s regional currencies. With a sudden uptick in stocks Monday, the Swiss franc (CHF) in particular was dropping fast against the Scandinavian kroner, which jumped near 4% on the day.
Other reports from forex analysts have noted the Norwegian krone’s (NOK) ability to act as a hedge against volatility, a relatively safer investment than traditionally high yielding assets when risk appetite is on the rise, and its traditional tracking value against Crude Oil makes its movements somewhat more stable.
Coupled with the forecasts of double-digit trade growth and a solid pace of economic expansion, the Norwegian economy seems to be positioned for serious gains in the months ahead. Forex traders have begun to shift assets in the direction of the NOK and it will be interesting to watch if the currency will shake off its mimicking behavior of oil as the price of crude continues to plummet.
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