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Pound to Norwegian Krone (GBP/NOK) Exchange Rate Steady Despite Stronger-Than-Expected Norwegian Manufacturing Output

August 7, 2020 - Written by John Cameron

GBP/NOK Exchange Rate Rangebound Despite Rising Oil Prices

The Pound to Norwegian Krone (GBP/NOK) exchange rate held steady today, with the pairing currently trading around 11.789kr.

The Norwegian Krone (NOK) failed to gain on the Pound (GBP) today despite a stronger-than-expected Norwegian manufacturing output figure for June, which rose from -0.3% to 0.4%.

Nils Kristian Knudsen, an interest rate strategist for Handelsbanken Capital Markets, said that the Norwegian Krone (NOK) had benefited from rising oil prices. Norway’s economy relies heavily on the price of oil, with the nation being one of the world’s major exporters of the commodity.

However, Knudsen said the Norwegian Krone would remain sensitive to outside pressures, adding:

‘It all depends on what consumer demand will be like and how strong economic growth will be.’

In other Norwegian economic news, today saw the release of the credit indicator figure for June, which fell below consensus from 4.6% to 4.5%.

Pound (GBP) Steady as UK Chancellor Warns of ‘False Hopes’ on Furlough Extension

The Pound (GBP) struggled to gain on the Norwegian Krone (NOK) today after British Chancellor Rishi Sunak warned that extending the furlough scheme could give employers false hope about returning employment amid the Covid-19 pandemic.

Mr Sunak also buoyed hopes for the British economy, however, saying that the Government hopes to secure a post-Brexit deal with the European Union by September.

In UK economic news, today saw the release of the latest Halifax house prices figure for July, which jumped by 1.6% in a ‘surprising spike’. As a result, GBP investors have become moderately more optimistic about Britain’s economic outlook.

Russell Galley, the managing director at Halifax, commented on the data:

‘The latest data adds to the emerging view that the market is experiencing a surprising spike post-lockdown.

‘Supported by the government’s initiative of a significant cut in stamp duty, and evidence from households and agents suggesting that confidence is currently growing, the immediate future for the housing market looks brighter than many might have expected three months ago.’

GBP/NOK Forecast: Could the Norwegian Krone Suffer as Oil Prices Fall?

Pound (GBP) traders will be looking ahead to Monday’s release of the latest BRC like-for-like retail sales figure for July. Any improvement would prove GBP-positive.

Norwegian Krone (NOK) investors will be awaiting Monday’s release of July’s PPI figure. However, if this confirms forecasts and falls by -11.7%, then we could see NOK suffer.

Nonetheless, the Norwegian currency will remain sensitive to global risk sentiment and oil prices next week. As a result, we could see the NOK/GBP exchange rate fall if oil prices sink on fears of a second-wave of the coronavirus.

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