That oil exporter status also underscore the importance of defending the Norwegian krone against rival currencies, namely the euro. As speculation has grown Norges Bank will lower rates, the Norwegian krone has tumbled.

“The krone is down about 3 percent against the euro following the bank’s June 19 decision. After the Swedish krona, it’s the worst performer this year among 10 major currencies tracked by Bloomberg Correlation-Weighted indexes,” according to Bloomberg.

However, Norwegian stocks have yet to respond to rate cut speculation. Since June 19, NORW and ENOR are down 1.3% and 3.9%, respectively. [Tactical Use of Single-Country ETFs]

A possible catalyst for Norwegian stocks is valuation. Stocks in Norway currently trade well below their historical cyclically-adjusted price-to-earnings ratio (CAPE). For example, ENOR’s P/E ratio is about 16.7 compared to 21.7 for the iShares Europe ETF (NYSEArca: IEV).

Global X Norway 30 ETF