Norway’s Krone Jumps after GDP Growth Exceeds Estimates

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Norway’s Krone Jumps after GDP Growth Exceeds EstimatesThe Norwegian krone surged after the country’s gross domestic product grew faster than estimated in the three months through June. The currency advanced by up to 0.7 percent versus the euro to 8.1561, the most since June 18.

Norway’s GDP, adjusted for oil and gas and shipping, rose 1.2 percent after surging 0.5 percent in the first three months of the year, reported Statistics Norway. Economists in a Bloomberg News survey had forecasted the economy to expand 0.6 percent over the period. Overall GDP grew 0.9 percent against expectations of 0.5 percent.

“Today’s numbers should without a doubt close the door for a rate cut,” Erica Blomgren, a chief strategist at SEB AB, said. “Undoubtedly, Norges Bank will have to revise its mainland GDP forecast for 2014 higher.”

Domestic consumers are supporting economic growth, as declining mortgage rates push up home prices and labor market strengthens. Domestic spending grew 0.8 percent in the second quarter, while investment rose 1.4 percent. Exports declined 0.6 percent while imports jumped 0.9 percent, said the statistics agency. Petroleum and shipping stagnated.

Meanwhile, the Canadian dollar rose against its U.S. counterpart on Thursday, reversing its earlier losses just before the release of key local economic data this week. The currency had earlier declined to nearly a two-week low on fears of weak global growth after business expansion in Europe and China tumbled in August.

The loonie closed at C$1.0945 against tits US counterpart, or U.S. 91.15 cents. Traders have shifted their focus towards Canadian retail sales and inflation reports due to be published on Friday. Focus is also on the annual convention of global central bankers and economists in Jackson Hole, Wyoming, where Federal Reserve Chair Janet Yellen is scheduled to make a speech on Friday. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Yashu Gola at yashu@forexminute.com