August 25, 2020 - Written by John Cameron
STORY LINK Pound to Norwegian Krone (GBP/NOK) Exchange Rate Edges Higher as Norway’s Growth Falters in Second Quarter
GBP/NOK Exchange Rate Rises as Norway Suffers Deepest Decline in GDP Ever Recorded
The Pound to Norwegian Krone (GBP/NOK) exchange rate rose today, with the pairing currently trading around 11.788kr.
The Norwegian Krone (NOK) suffered today following the release of Norway’s gross domestic product figure for the second quarter, which fell below forecasts from -17% to 5.1%.
As a result, NOK investors have become increasingly worried about Norway’s economic performance.
The SSB said in its statement:
‘The decline in the Norwegian economy in the second quarter was the deepest ever recorded. Quarterly national accounts are available back to 1978.’
Meanwhile, Handelsbanken Capital Markets said to their clients:
‘We continue to believe that it will take time for the economy to reach back up to pre-crisis levels; at least, it will take time to restore full capacity utilisation.’
Norwegian Krone (NOK) investors are keeping a close eye on Norway’s coronavirus developments. With lockdowns gradually being lifted, hopes are beginning to grow for a rebound in the nation’s economy. As a result, we could see the NOK/GBP exchange rate begin to creep higher.
Pound (GBP) Edges Higher Despite Grim Outlook for British Retail Sector
The Pound (GBP) edged higher despite the release of the UK CBI distributive trades survey for August revealing an unexpected slump. The figure fell below forecasts from 4% to -6%, leaving GBP investors concerned for the UK’s economic recovery from the Covid-19 crisis.
Alpesh Paleja, CBI Lead Economist, commented on the data:
‘[T]he latest survey shows that trading conditions for the retail sector remain tough, even against the backdrop of business slowly returning. Firms will be wary of deteriorating household incomes and the risk of further local lockdowns potentially hitting them in the pocket for a second time.’
Meanwhile, concerns over escalating tensions between the UK and the EU have left GBP investors cautious as a no-deal appears more likely to be a realty post-December 31st.
Michel Barnier, the EU’s Chief Negotiator, has criticised Downing Street’s approach to trade negotiations, calling for the Eu to be more ‘cold-blooded’ in its approach.
Consequently, the Pound (GBP) has come under increasing pressure as the UK looks increasingly set for a disorderly exit at the end of the year.
GBP/NOK Outlook: Could a Bullish Bank of England Boost the Pound Tomorrow?
Norwegian Krone (NOK) investors will be awaiting tomorrow’s release of June’s Norwegian labour force survey. Any improvement in Norway’s employment levels could provide a boost for the Norwegian currency.
NOK traders will also be awaiting Thursday’s publication of the latest Norwegian retail sales for July. If these confirm consensus and fall by -1.5%, then we could see the NOK/GBP exchange rate continue to struggle.
The GBP/NOK exchange rate could edge higher tomorrow if the Bank of England’s (BoE) chief economist, Andrew Haldane, is notably bullish in his speech.
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TAGS: Norwegian Krone Forecasts Pound Norwegian Krone Forecasts