The deputy governor Jan F. Qvigstad at the Norwegian Central Bank, Norges Bank, just signaled that the bank might have to take rate action due to the strong Norwegian Kroner.
Qvigstad said that if the Norwegian Kroner continues to be this strong, it will effect rates. He also said that the NOK is stronger than the Central Bank assumed it would be.
It is no wonder that Norges Bank reacts to the strong Norwegian Kroner. Yesteday it was at the 2nd strongest level ever, import weighted. The I-44 Index was at 84.74, just a few ticks above all time strongest.
This is the first time in quite a while that Norges Bank has adressed the strong currency. Of the reasons for the Central Bank's torrelance to a strong currency is the high level of hedging going by Norwegian companies.
But the hint from Qvigstad was enough to weaken the NOK signifficantly against the Euro:
