Norway’s krone strengthened from a 13-year low versus the dollar alongside the currencies of other commodity-producing nations as oil prices rebounded.
Crude oil climbed after slumping Monday, also boosting the currency of Sweden, whose biggest export is refined petroleum. Norway’s central bank lowered interest rates to an all-time low on Sept. 24 to tackle an economic slump caused by a collapse in oil prices that set the Bloomberg Commodity Index on course for its worst quarter since the end of 2008. South Africa’s rand rallied from a record low versus the dollar.
“We’ve just seen a reversal in both the krone and Swedish krona, which is mostly driven by the recovery in the oil market,” said Ipek Ozkardeskaya, a markets analyst at London Capital Group Ltd. “Especially on Norway’s krone, the oversold conditions could lead to a re-test of 8.4 to 8.45” per dollar, she said.
Norway’s krone appreciated 0.4 percent to 8.4971 per dollar as of 7:03 a.m. New York time, after sliding to 8.6017 on Monday, its weakest level since 2002. It advanced for the first time in six days versus the euro, gaining 0.5 percent to 9.5478, after slumping to this year’s low of 9.6281.
Sweden’s krona was also supported after the International Monetary Fund said growth is set to remain strong even as external risks rise. The currency advanced 0.6 percent to 8.4106 per dollar. It jumped 0.7 percent to 9.4495 to the euro, the biggest daily climb in more than two weeks.
The rand gained 0.8 percent to 13.9522 to the dollar, after touching 14.1588, the weakest level since Bloomberg began collecting the data in 1971.
Worst Hit
The currencies of commodity-producing nations have been among the worst hit this quarter, with the 24 percent slump in Brazil’s real leading the slide. Investors have shunned raw materials and their producers amid concern a slowdown in China will diminish demand, leading companies such as Royal Dutch Shell Plc and Alcoa Inc. to scale back operations.
Haven demand has pushed the yen, euro and Danish krone higher against the dollar since the end of June, the only three currencies to gain versus the greenback among 16 of its major peers tracked by Bloomberg.
The yen whipsawed with stocks Tuesday, erasing a 0.6 percent advance to settle at 119.93 per dollar. Its one-month implied volatility against the greenback, a measure of anticipated price swings in the exchange rate based on options, climbed to a two-week high. The yen gained 0.1 percent to 134.74 per euro. Europe’s shared currency strengthened 0.1 percent to $1.1233.