Reply #23: Norway's Krone Advances as Economy Expands More Than Forecast [View All]

[Ghost Dog]

http://www.bloomberg.com/apps/news?pid=20601083&sid=a1tT_77C9g.M&refer=currency

May 23 (Bloomberg) -- The Norwegian krone advanced the most in more than two months after a government report showed economic growth expanded more than forecast, adding to pressure on the central bank to increase interest rates.

The krone rose for a fifth day, its longest winning run in 10 weeks, after a report by Statistics Norway showed the mainland economy, excluding oil and shipping, expanded 1.4 percent in the first quarter. It is the 13th consecutive quarter of growth, and above the 1 percent mean estimate of 16 economists surveyed by Bloomberg.

``Overall, the GDP figure is a strong number, but not strong enough to lift the krone for long,'' said Jonas Schough, a currency trader at Svenska Handelsbanken AB in Stockholm. ``Given the recent strengthening due to rising oil prices, it might be tough to strengthen further from the current level.''

Against the euro, the krone gained 0.3 percent and traded at 8.1107 by 4:40 p.m. in Oslo, near the highest since May 2, from 8.1336 yesterday. Norway's currency is the fifth-best performer against the euro and the dollar this year of the 17 most-traded currencies monitored by Bloomberg.

Norway's annual economic growth has exceeded 4 percent for the past three years, and 13 quarters of expansion is the longest period of uninterrupted growth since at least 1978. The central bank has said it will raise the benchmark rate to 5 percent by- year end to curb inflation and growth.

Oil Prices

The krona has risen this week along with oil prices. Norway is the world's fifth-largest oil exporter, and the stock market has gained for seven days, paced by buying of shares of energy companies such as Statoil ASA and Norsk Hydro ASA. Investors need to buy local currency to purchase the stocks.

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