Pound Norwegian Krone (GBP/NOK) Exchange Rate Trends Lower in Spite of Oil Price Slump

October 26, 2020 - Written by Frank Davies

STORY LINK Pound Norwegian Krone (GBP/NOK) Exchange Rate Trends Lower in Spite of Oil Price Slump

Resurrgence in Covid-19 Vaccine Optimism Limits Pound Norwegian Krone Exchange Rate Strength

Ongoing UK-EU trade talks were not enough to keep the Pound Sterling to Norwegian Krone (GBP/NOK) exchange rate from softening at the start of the week.

As markets saw renewed hopes of progress towards a Covid-19 vaccine this spurred investors to favour higher-yielding assets in a wave of risk appetite.

This offered the Norwegian Krone a modest leg up against its rival, even as the prospect of increased Libyan oil production prompted a sharp slide in global oil prices.

However, with little fresh economic data on the calendar on Monday the ultimate movement of the GBP/NOK exchange rate proved relatively limited.

Pound Vulnerable to Decline in CBI Distributive Trades Index

The mood towards the Pound could sour once again on Tuesday, though, with the release of the latest CBI distributive trades index.

Forecasts suggest that the headline index will dip from 11 to just 1 in October, suggesting a significant decline in confidence within the retail sector.

Evidence that the retail sector came under greater pressure at the start of the fourth quarter could see the Pound fall further out of favour with investors.

As stronger levels of consumer spending and retail sector activity have previously helped to shore up the wider economy any slowdown here could weigh heavily on the GBP/NOK exchange rate.

Even so, if there are any fresh signs of progress in UK-EU talks over the course of the week this may encourage GBP exchange rates to rally once again.

As long as the UK economy appears less at risk of suffering a no-deal scenario the downside potential of the Pound is likely to prove limited.

Recovery in Norwegian Retail Sales Set to Dent GBP/NOK Exchange Rate

A stronger rally could be in store for the Norwegian Krone on Wednesday, meanwhile, with forecasts pointing towards a recovery in September’s retail sales data.

After the sharp -4.9% decline seen in August investors are hoping to find that sales saw a moderate bounce back on the month.

Growth of 1% could help to limit lingering anxiety over the health of the Norwegian economy, offering the Krone a boost against its rivals.

On the other hand, another lacklustre month of retail activity may encourage investors to sell out of the Krone and brace against the possibility of a weaker quarterly growth performance.

As long as global oil prices remain in decline this could also weigh on NOK exchange rates, thanks to the economy’s ties to the oil industry.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound Norwegian Krone Forecasts