The Pound Sterling to Norwegian Krone exchange rate advanced by 1% on Monday as oil prices dropped and market jitters over the situation in Greece weighed upon sentiment.
The GBP/NOK exchange rate hit a session high of 11.761
Earlier in the session, the Norwegian Krone had briefly edged higher as oil prices found support that the current Greek crisis had been averted. However, with a deal yet to be confirmed by both Greece and its creditors the Eurozone is not out of the woods yet. As a result, the market remained jittery over the situation.
Concerns over an oversupply of oil in North America and an increase in overall supply sent prices falling on Monday, a move that weighed heavily on the world’s oil linked currencies such as the Norwegian Krone and Canadian Dollar.
Oil prices had previously been moving higher on concerns that conflict in Libya and the Middle East reduced oil production and supplies. Militants destroyed a major oil pipeline last weekend in Libya and heavy fighting had forced the closure of an oil terminal.
In Monday’s session, Libya’s largest oil field and major oil port were brought back online. The Sarir oil field, which pumps around two-thirds of the nations remaining output, was repaired, as was the Zueitina terminal in the east of the country. The resumption of oil production in the North African nation saw supplies rise and push oil prices lower.
In the morning, the price of West Texas Intermediate crude oil was down more than 4% to trade back below $49 after crude had another wild week in which prices finished lower after trading as high as $54 a barrel.
With a lack of market, moving economic data releases due for both the Pound and Norwegian Krone at the start of the week we can expect the GBP/NOK exchange rate to remain supported as oil prices soften.
The Krone is likely to soften further as the week progresses as economists forecast that the unemployment rate in the Scandinavian nation will rise from 3.7% to 3.8%. The Norwegian oil industry is likely to have seen a rise in job layoffs due to the falling price of the commodity.
The main event for the Pound Sterling exchange rate will occur on Thursday with the release of UK GDP data. The second estimate for the fourth quarter is forecast to show that the nation’s economy expanded at a pace of 0.5%, down from the first estimate of 0.7%. A worse than forecast decline and the Pound will fall.
During the European session the Pound Sterling to Norwegian Krone (GBP/NOK) exchange rate was trading in the region of 11.7396