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This Nordic Currency Is Headed North: Strategist

Norwegian Oil Rig
Source: olf.no
Norwegian Oil Rig

With Europe seesawing, this Scandinavian is worth another look.

It's hard to stop watching the Greek drama unfolding in Europe. But investors who manage to glance up north will notice that the Norwegian krone has had a banner month. And Valentin Marinov, a currency strategist at Citigroup, thinks the best is yet to come.

A combination of encouraging headlines from the euro zone and risingoil priceshave combined so that "NOK stands out as the big performer in G10 this month," Marinov wrote in a note to clients.

Norwegian central bank officials in the past have used interest rates to keep their currency from rising too high, and they have been talking about the high krone recently. But Marinov says their concern seems less urgent than in the past, and in any case, he believes the market has already factored in a potential 25-basis-point rate cut in mid-March.

"In our view, it will take indications of even greater accommodation ahead to lastingly impact the krone," he says.

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