Norwegian Krone Holds Firm as Labour Secures Second Term

The Norwegian krone was little changed at 10.0 per USD, hovering near its strongest level since mid-June, after the minority Labour government secured a second term in an election dominated by concerns over rising living costs and the wars in Ukraine and Gaza. The outcome leaves Prime Minister Jonas Gahr Støre more reliant on parliament, as he must now work with four smaller left-leaning parties, up from two previously. This could complicate efforts to govern effectively and to pass key legislation, including fiscal budgets. Støre’s first term was marred by high inflation, rising interest rates, and a series of ministerial resignations over scandals involving tax evasion, undisclosed share trading, and ethical breaches. However, a cabinet reshuffle earlier this year, coupled with increased focus on foreign policy and security, has helped bolster his support.