What European country has a "smoke bay" as its capital?

Seems to be what Freetranslation.com calls "Reykjavik" in Iceland. (The translation to Swedish says "Rök Vik", and in Norwegian "Røyk Bukt".)

Iceland is an island in the North Atlantic Ocean, close to the Arctic Circle. It was settled by Norwegian Vikings in the 9th century, the last country in Europe to be settled. Several Irish hermits were living in the country previously, but they don’t seem to have liked living among a pagan people and went back to Ireland. The first settler is reputed to have been Ingolfur Arnarson in AD 874. He established his home by a bay on the southwest coast and named it Reykjavik, which in English means ‘Smoke-Bay’

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