Norway’s central bank held its policy rate steady at 1.5 percent and said it saw no reason to revise its view from March that the rate will remain around this level for the next year and then gradually rise toward a more normal level.
     Norges Bank, which cut its rate by 25 basis points in 2012, said Norway’s economy had evolved largely in line with the central bank’s expectations and “global growth remains robust” while growth prospects for the euro area had weakened somewhat.
    Deputy Governor, Jan Qvigstad, said in a statement that inflation had been slightly lower than expected and wages were expected to rise somewhat slower than forecast. On the other hand, the Norwegian krone had depreciated, unemployment was low and Norway’s economy was growing at a solid pace while household debt continued to rise from a high level.
    “The key policy rate is low because inflation is low and because external interest rates are very low,” Qvigstad said, repeating the bank’s oft-used phrase.
    In March Norway’s inflation rose to 1.4 percent from 1.0 percent in February, but still well below the central bank’s 2.5 percent target. The last time inflation was above the bank’s target was in December 2011 and since February 2012 it has been below 2.0 percent.
    The Norwegian central bank first started easing its upward rate bias last October and finally at its previous meeting in March the central bank delayed any rate change until next year.
    “In March, the key policy rate was projected to remain at around the current level for the next year before being raised gradually towards a more normal level. There is no basis for changing this assessment for now,” Qvigstad said.
    Norway’s Gross Domestic Product expanded by 3.5 percent 2012, up from 2.5 percent in 2011, but the government this week cut its 2013 growth forecast to only 1.4 percent from a previous forecast of 2.5 percent.

    www.CentralBankNews.info

The dollar rose sharply against the Japanese yen on positive signs on the US economy as job creation in March and April increased more than expected.

It rose more than 1 per cent against the yen and initially wiped out earlier losses against the euro and the pound after non-farm payroll figures for April were higher than expected, with 165,000 jobs created last month.

Job creation for the previous month was revised upwards significantly, leading to optimism on the strength of the US economy.

The dollar rose 1.3 per cent against the yen to Y99.27 after the figures were released.

“The data is very solidly US dollar positive, but probably not enough to prompt an immediate assault on the Y100 level for the dollar-yen,” said Alan Ruskin, currency strategist at Deutsche Bank.

The euro fell against the dollar following the jobs figures but later clawed back its losses after separate data showed that the US services sector grew at a slower pace in April, maintaining expectations that the Federal Reserve would continue to ease monetary policy to stimulate the economy. The single currency was later 0.4 per cent higher at $1.3159.

The dollar had made gains earlier in the week after the US Federal Reserve said it would continue buying bonds to stimulate growth for as long as necessary after the economy grew by less than expected in the first quarter of the year. The US dollar also rose after the European Central Bank cut headline interest rates in the eurozone on Thursday.

The euro declined 1 per cent against the dollar after Mario Draghi, ECB president, hinted at the possibility of a further rate cut and negative deposit rates in the future.

“Negative deposit rates would be euro-negative across the board adding to the upside pressure on European currencies like the Swedish krona, the Norwegian krone, the UK pound and the Swiss franc,” said foreign exchange analysts at Citigroup.

The single currency rose more than 1.5 per cent against the yen on Friday to Y130.34 and was 0.2 per cent stronger against the pound at £0.8422.

The UK pound rose after figures showed that the UK services sector grew at its fastest rate in eight months in April. Despite losing ground after the US jobs report, sterling was later 0.3 per cent higher on the day to touch $1.56 against the dollar, remaining close to its highest level in three months.

TMZ reports:

Snoop Dogg was detained at an airport in Norway this morning … after customs officers discovered … wait for it … SNOOP WAS PACKIN’ TWEEDS!!!

The Agder Police Department tells TMZ … Snoop was stopped at customs at the Kjevic Airport in Kristiansand … where officials discovered 8 grams of “that good”.

According to the cops, anything less than 15 grams is merely punishable by a fine — and in Snoop’s case, the violation ran him 12,000 Norwegian Krone … which converts to roughly $1,980.13.

We’re told Snoop was cooperative … and quickly took care of the fine … because he probably carries that kind of money in his back pocket.

FYI — Snoop is in the country to perform at the Hove Festival at 10:30 PM local time … which still gives him a few hours to find some replacement blaze.

While stocks surged on Monday on optimism that the crisis would be resolved, the bond market wasn’t nearly as giddy. That leaves it particularly suspicious, according to Camilla Sutton, chief currency strategist at Scotia Capital.

As the selection of AAA-rated government bonds dwindles (just 14 are rated AAA by all three rating agencies) and the eurozone crisis escalates, she sees value investing in a basket of non-euro AAA currencies against a short position in the U.S. dollar.

Ms. Sutton noted that most of these AAA-rated bond markets are relatively small and as the end of the year approaches, the pressure to shift towards them is likely to increase.

They include the Canadian dollar, British pound, Australian dollar, Swedish krona, Singapore dollar and Norwegian krone.

Going back to Friday, the stripped out version of the non-farm payrolls figure produced much stronger numbers than had been anticipated. The market now feels that removing the seasonally volatile short-term Government hirings gives a much more relevant picture of the employment situation. Accordingly, August private payrolls were reported to have grown by 67,000 (against the consensus figure of 40,000) whilst the July number was revised up from the previously reported -131,000 to -54,000. Economists quickly concluded that, although the US economy continues to face problems ahead, and that the unemployment rate will likely remain stubbornly high, Friday’s employment report is an important step in the right direction, and should weaken the case for additional quantitative easing on the part of Federal Reserve.

Today’s subdued market is likely to set the tone for certainly the early part of the week with only a light amount of data scheduled and no policy changes anticipated at any of the 3 Central Bank meetings over the coming days. Following the additional easing measures decided upon at the emergency meeting on 30th August, the market expects the Bank of Japan to maintain its policy settings tomorrow morning. Market focus will continue to be on the seemingly inexorable appreciation of the Yen and what the government is going to do to try and suppress it. The Reserve Bank of Australia is also expected to maintain the status quo on rates given the unexpectedly low CPI figure for the 2nd Qtr of the year. For the BoE policy announcement, there is unlikely to be much to get excited about – the official UK interest rate and the levels of QE purchases will both be unaltered in September. The minutes of the meeting, to be published on 22 September are a different matter as there is a real possibility of the discussions revealing a three-way split on the Committee. All the debate will be between the external members of the Committee, with Andrew Sentance sticking to his guns on the need for higher rates, whilst the other three members, (David Miles, Adam Posen and Martin Weale) all possible advocates for the instigation of a 2nd round of easing.

By: Keith Spitalnick

M&A activity in the US, helped lift sentiment yesterday, unfortunately this did not last for long and both main stock indexes closed marginally down on the day. There is little economic news again today so focus is likely to remain on the existing home sales in the US which is out this afternoon at 15:00. Figures are expected to show that sales of existing US homes fell to an annual rate of 4.67million in July from 5.37 million in June. There is also housing data due out tomorrow which is due to show that sales of new homes rose to 340,000 from 330,000 in June.

In Europe we have seen data from the Federal Statistics Office this morning confirm that German GDP grew 2.2% in the second quarter compared with the previous three months, which is actually up 4.1% on the year. The news provides yet further evidence of the strength of the recovery in Germany whilst other countries in the Euro zone still falter. Yesterday consumer confidence in the Euro zone and the European Union improved slightly in August according to figures from the European Commission. The figures rose to -11.4 from -13.8 for the 16-country currency area and beat expectations of -12.8 although this data release went relatively unnoticed in the markets and did not impact on the euro.

By: Keith Spitalnick

USD/NOK ended the week at 5.9064 from an opening rate on Friday at 5.8923.

USD/NOK closed at 5.9875 from an opening rate of 5.9994.

USD/NOK traded at 5.8685 as of 20:51 from an opening rate of 5.8360 this Wednesday.

USD/NOK traded at 5.6518 as of 19:08 GMT from today’s opening rate of 5.6174.

“The money was seized after a thorough check of the man’s vehicle. This is the largest currency seizure at Svinesund ever.”

Wenche Fredriksen

According to the Norwegian News Agency, Norsk Telegrambyrå (NTB), a Lebanese citizen, was stopped Monday night on his way out of Norway, with almost two million Norwegian kroner in cash.

The 59-year-old man was stopped by Swedish customs officials at Svinesund. He was on was on a trip from London back to Sweden where he lives, according to  Customs.

It was the Swedish customs officials who first discovered a carrier bag filled with money hidden under the man’s car seat on his way into Sweden, and then alerted their colleagues on the Norwegian side.

“A total of 1,994,500 Norwegian kroner was seized after a thorough check of the man’s vehicle. This is the largest currency seizure in Svinesund ever, ” says Office Manager Wenche Fredriksen at the Norwegian border control on Svinesund.

The 59-year-old admitted later that he was sent to retrieve the money in Norway, and was going to bring them to Sweden.

The customs officers notified the police, who then arrested the man.

Svinesund is the most used border between Norway and Sweden.

Monday’s currency seizure at Svinesund is the second largest ever in Norway.

The record seizures happened in July 2001, when Customs officers in Fredrikstad found  NOK 3,5 million.

Source: NTB

Related articles by Zemanta

• Norway’s Krone: Why So Strong? (seekingalpha.com)
• Scandinavia At War (atwar.blogs.nytimes.com)
• Hodgson rejects offers from Sweden and Norway (guardian.co.uk)