Sept. 24 (Bloomberg) -- Norway's krone advanced to a 26-year high against the dollar as oil traded near a record and on speculation economic reports will show U.S. growth is slowing.
The krone rose as oil prices held above $80 a barrel a sixth day, boosting the currency of the world's fifth largest exporter of the commodity. U.S. home sales are expected to fall to a five- year low and household confidence is predicted to slump to the weakest in more than a year, according to Bloomberg News surveys, adding to the case for further rate cuts.
Against the dollar, the krone rose as much as 0.5 percent to 5.5012, the highest since November 1981, and traded at 5.5217 by 2:21 p.m. in Oslo, from 5.529 on Sept. 21. It gained to 7.7831 per euro, from 7.7908 on Sept. 21.
Norges Bank lifted its main interest rate to 4.75 percent on Aug. 16 and reiterated it would move to 5.25 percent by year-end and to 5.75 percent by mid-2008.
The central bank meets on Sept. 26, with a majority of economists predicting it will keep the benchmark rate unchanged. Six of 16 economists forecast it will raise rates to 5 percent.
Higher oil prices support the Norwegian currency, which is the fourth-best performer of the 16 major currencies monitored by Bloomberg this month. High crude prices underpin economic growth and employment, raising the risk of inflation.
In other trading, Sweden's krona rose to as high as 6.4974 against the dollar, the strongest since December 1995, and last traded at 6.5089. Iceland's krona was little changed at 62.385 per dollar, near a two-month low.
In the Nordic bond market, the yield of the Norwegian 5.5 percent note maturing May 2009 was little changed at 4.85 percent. The yield on the Swedish 5.25 percent note maturing March 2011 was unchanged at 4.19 percent. Yields move inversely to bond prices.
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