Oil price decline whacks Norwegian currency

The Norwegian krone was able to stand up last month, despite of declining oil prices, which was surprising. Against EUR, it was performing better, however the euro was also effected by ECB's monetary policy decision.

The collapse of oil price over last few days is now weighing on the krone, after the ECB dampened its performance by loosening its monetary policy way lesser than anticipated.

The price of Brent oil fell well below USD 40 per barrel mark, simultaneously EUR/NOK leaped to 9.60, being not only whacked by the oil price, but also because of ECB. 

"Further Norges Bank rate cuts are now likely to have a much stronger effect on EUR/NOK than could have previously been assumed due to the ECB's more relaxed approach. That means krone's strong depreciation is certainly justified", says Commerzbank in a research note. 

EUR/NOK is currently trading at 9.5418, while NOK is trading at 8.75 against the US dollar.