Norway’s gas riches spur a wave of bullish currency calls
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Loading... - David Green
- 25 Jan 2023
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The immense wealth coming from Norway’s oil and gas fields is underpinning a new refrain among market experts: it’s time for a big rebound in the krone.
Danske Bank A/S and Bank of America Corp said the currency is a bargain given its decade of losses and the fact that Norway is now reaping trillions of krones from energy exports.
In the past decade, the krone lost about a third of its value against the euro, the biggest decline in the Group-of-10 (G-10).
According to Morgan Stanley, the Norwegian currency is likely to surge 15% against the dollar this year, delivering the best return among the G-10 peers. Deutsche Bank AG calls it the cheapest currency in the world.
The bullish case has everything to do with Norway’s status as the main supplier of natural gas to the European Union, stepping into a role that was once held by Russia.
Norwegian oil and gas exports, which make up more than half of the country’s total exports, surged 130% over the past year.
“The Norwegian krone for the first time in a long while seems undervalued,” said Kristoffer Kjaer Lomholt, a currency strategist at Danske Bank in Copenhagen.
The krone is down 2% against the euro since the start of the year, underperforming all its G-10 peers due to a broad rally in the common currency, while natural gas prices have eased. Read More…
