The name of which capital literally means "Bay of Smoke"?

Reykjavík is the capital and largest city of Iceland. It is located in southwestern Iceland, on the southern shore of Faxaflói bay.

Steam from hot springs in the region is said to have inspired Reykjavík's name, which loosely translates to Smoke Cove (the city is sometimes referred to as Bay of Smoke or Smoky Bay in English language travel guides). In the modern language, as in English, the word for 'smoke' and the word for fog or steamy vapor are not commonly confused, but this is believed to have been the case in the old language.

Reykjavík is believed to be the location of the first permanent settlement in Iceland, which, according to Landnámabók, was established by Ingólfr Arnarson in AD 874. Until the 19th century, there was no urban planning in the city location. The city was founded in 1785 as an official trading town and grew steadily over the following decades, as it transformed into a regional and later national center of commerce, population, and governmental activities. It is among the cleanest, greenest, and safest cities in the world.