As the European session progressed the Krone took a tumble against the Euro, broadly weakening as a result of softer-than-forecast growth figures.
Economists had estimated that Norway’s economy would expand by 0.7 per cent in the second quarter of the year, but GDP actually only advanced by 0.2 per cent.
The Norwegian Krone Exchange Rate was in the region of 7.8909 Krone per Euro as of 10:15 am GMT
First quarter growth was revised to 0.6 per cent.
Meanwhile, total output came in at a gain of 0.8 per cent, missing expectations for expansion of 1 per cent.
The less-than-impressive result has increased the odds of the Norwegian central bank cutting interest rates.
After opting to keep its benchmark rate at 1.5 per cent in June the central bank hinted that in order to bolster growth and temper slowing deflation a rate cut would be considered.
However, in the wake of positive domestic retail sales, inflation and production figures the odds of a rate cut fell.
Now they have climbed once more.
As analyst Kjersti Haugland comments: ‘After this number, a rate cut is not out of the question anymore, as some have argued. We do, however, see that since the inflation figure was released the probability of a rate cut in September is significantly lower.’
After the growth data was published the Krone slid by 1.4 per cent against the Euro and 1.3 per cent against the US Dollar.
Upcoming Norwegian data releases, including next week’s unemployment rate and retail sales figures, will now be watched closely as another disappointing result will further increase the likelihood of a rate cut.
Current Exchange Rates:
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The Norwegian Krone/Pound Sterling Exchange Rate is currently in the region of: 0.1080 <
The Norwegian Krone/Euro Exchange Rate is currently in the region of: 0.1270 >
The Norwegian Krone/ US Dollar Exchange Rate is currently in the region of: 0.1674 <
The Pound Sterling/ Norwegian Krone Exchange Rate is currently in the region of: 9.2618 >
The Euro/Norwegian Krone Exchange Rate is currently in the region of: 7.8909 >
The US Dollar/Norwegian Krone Exchange Rate is currently in the region of: 5.9169 >
The Australian Dollar/Norwegian Krone Exchange Rate is currently in the region of: 5.4426 >
(Correct as of 10:15 GMT)
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