June 5, 2019 - Written by John Cameron
STORY LINK Pound Norwegian Krone (GBP/NOK) Exchange Rate Rises despite Averted Norwegian Oil Strikes
GBP/NOK Exchange Rate Edges Higher as Norwegian Negotiators Avoid Oil Strikes
The Pound Norwegian Krone (GBP/NOK) exchange rate rose today and is currently trading around 11.0461kr on the interbank market.
The Norwegian Krone (NOK) is fell against the Pound (GBP) despite the planned oil strikes being averted after the Norwegian Oil and Gas Association agreed upon a pay deal, avoiding the economic strains of a the oil-reliant economy.
Jan Hodneland, the Lead Negotiator at the association commented:
‘These were very demanding negotiations, but agreement was finally reached on an economic framework similar to what was offered in the wage negotiations in May.’
Today saw the publication of the Norwegian current account figures for the first quarter, which increased to 67.78bn, providing some positive market sentiment for NOK.
Ongoing global economic tensions between the US and China are, however, reigning in some of the Norwegian Krone’s gains, with the economy particularly sensitive to both global and European – with Brexit remaining in focus – uncertainties.
GBP/NOK Exchange Rate Rises as UK Services Figures Improve
The Pound benefited from the release of the UK Markit services figures for May, which rose to 51.0, exceeding the forecast increase of 50.6.
Duncan Brock, a Group Director at the Chartered Institute of Procurement and Supply, remained cautious, however, saying:
‘[B]efore we bring out the bunting, a reality check is in order, as the underlying figures are still weak. Service businesses are still grappling with Brexit uncertainty, a weaker UK economy and rising operating costs.’
The US President Donald Trump’s state visit has tended to obscure political developments, however with uncertainty surrounding Brexit and the future leadership of the Conservative Party, this has held back Sterling.
Boris Johnson, the current favourite for the next leader of the Tories, has also commented that if the party fails to deliver Brexit, it could face extinction as its relevance would plummet – as seen during the European elections.
GBP/NOK Forecast: Sterling to Become Increasingly Subdued on Brexit and Leadership Uncertainties
Pound traders will be looking ahead to tomorrow’s speech by the Bank of England’s Mark Carney, and with any bullish comments about the UK economy this could provide some uplift for the GBP/NOK exchange rate.
Norwegian Krone traders, meanwhile, will be looking further ahead to Friday, which will see the release of the Norwegian manufacturing output figures for April, and with any improvement this could benefit NOK.
The Pound Norwegian Krone exchange rate will likely remain steady, with political news likely to drive Sterling as the question mark hangs above both Brexit and the Conservative leadership, preventing the pairing’s gains as traders remain cautious.
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TAGS: Pound Norwegian Krone Forecasts