Norway has managed to transfer economic growth into high standards of leaving, with the highest GDP per capita, staying ahead of most European countries and even the USA. However, experts underline that Norway’s National Bank faces difficulties in maintaining the stability of the national currency.
The krone is the official national currency of Norway since 1875 after Norway has become a member of the Scandinavian Monetary Union. Even after the crash of the Monetary Union, at the end of World War II, Norway, along with other Scandinavian countries, preserved the same name.
Coins entered circulation in the same year. The krone is split up into 100 øres. Lately, from 1875 until 1878, new coins appeared on the market, made from silver, gold, and bronze.
Silver was primary material for production of 10, 25, 50 øres; bronze for 1, 2, 5 øres, gold for krone of 10 and 20, as well as for value of 1 and 2 Krones. Lately, the manufacture of 1, 2, 5, 25, and 10 øres was discontinued due to inflation.
Banknotes of 5, 10, 50, 100, 500 and 1000 Krones were introduced in 1877. Coins substituted banknotes of 5 Krones in 1963 and notes of 10 Krones in 1984.
Important facts represented above shows that Norway has rejected gold as the instrument of payment only at the end of the 19th century, comparing to European countries that did that much earlier.
The secret of Norway is not about the banking system or tourism, ‘it’s not even about resources that country possess, ‘it’s about advanced government and effective management of assets. Hard to imagine any country which can beat Norway and their high standard of living.
A different situation is for the Australian dollar. Australia is a developed country, with a classical banking model, dominated by four major banks. This country was among the first ones, which replaced paper money with polymer, and afterword exchanged them for bankcards.
Traders like to say that these two different currencies are not on the list of attractive instruments, but it is possible to make a profit.
Both Norway and Australia focus and are in a strong dependence on raw materials. As an example, the Norwegian krone exchange rate stipulates by the cost of the oil.
Even a little change, drop of the oil prices will strike Norwegian krone immediately, and vise-versa will facilitate enhance of the ‘country’s economic situation.
Currency depreciation is another risk that is considered by traders on the exchange market. Krone is a peripheral currency, with an extremely high level of volatility; thus, a fair number of dealers decrease the number of Krones traded on the international market.
Oppositely, the Australian currency is the most traded one in the world, occasionally purchased as the pair.
Even though product factor (as oil in Norway), does not play a crucial role in the Australian economy, the price of the gold can decrease sharply as well.
In this scenario, AUD is in leading position always, comparing to NOK. The exemption will be the increase in oil prices, weakening of the southeast largest economies of China and Japan. The political and economic situation of the United States also influences the Australian currency.
Namely, these countries are the most significant trading partners; thus, any adjustment or transformation in business or political field will reduce in AUD. On the contrary, NOK will demonstrate excellent results, boosted by reasonable oil prices.
In reality, such a condition can appear, but it is not frequent. Traders with a vast background and experience comprehend the topic much more accessible. However, it requires a clear strategy for several weeks or months in advance and accurate fundamental analysis.