Norway’s krone slid the most in more than two months against the dollar as a report showed the unemployment rate rate unexpectedly rose in June.
The currency of western Europe’s largest oil producer fell versus 15 of its 16 major peers. The jobless rate jumped to 4.5% from 4.3%, according to a report from Statistics Norway in Oslo. Economists surveyed by Bloomberg predicted that the reading would be unchanged from May.
Norway’s currency is suffering from falling investment amid a slump in oil prices that’s proving to be painful for a nation that depends on petroleum-related products for almost half its exports.
That’s fueling speculation Norway’s central bank will cut borrowing costs further after reducing its main interest rate to a record-low 1% in June.
The outlook for the krone is “still negative given we have not seen the full effects of lower oil price on the economy,” said Carl Hammer, chief foreign-exchange strategist at SEB AB in Stockholm. While some long-term investors may judge the currency to have fallen to levels that are attractive “it is too early to pile in,” he said.
The krone slumped 1.3% to 8.3310 against the dollar on Wednesday, the biggest drop since June 18.
Against the euro, it was fractionally weaker at EUR9.5049, the weakest since Dec. 16.