Dollar hits 13-year peak vs Norway's krone after Norges Bank trims rates

Earlier in the day, Norges Bank cut its interest rates in a response to slower economic growth caused by a fall in oil prices. The move send the dollar soaring against the local currency.

The dollar jumped 2% against the Norwegian krone, buying 8.4152 kroner compared with around 8.291 kroner late Wednesday. The krone was also knocked down against the euro, with the shared currency up 2.2% to buy 9.4707 kroner.

The euro rose against the dollar, up 0.58% at $1.1249.

The steep moves came after Norges Bank trimmed the key rate to 0.75% from 1%, and said it may need to cut the rate again over the coming year.

“Growth in the Norwegian economy is likely to remain low for a longer period than projected earlier owing to the fall in oil prices through summer,” Norges bank said in a statement.

In June, the Norges Bank had cut rates and said there was a probability of up to 70 percent of another cut in September if the economy developed as expected.

Since then domestic growth has weakened as a result of falling oil industry investments, but a weaker currency, higher inflation and a still strong housing market led many to expect a delay in the next cut.

Oil prices have fell more than 50% from their peak in the summer of 2014 as the market has faced oversupply amid concerns about a slowdown in energy demand from China.

Norway is a serious oil producer, and oil prices are unlikely to return to $100 a barrel for years.

Elsewhere, the Japanese yen rose against its rivals.

The dollar dropped to ¥119.62 from ¥120.29 late Wednesday in New York. The euro was slightly higher at ¥134.52 compared to ¥134.50.