With a lack of market moving economic data released on Monday, trading was light and allowed the Norwegian Krone (NOK) to hold onto the gains it achieved against the Pound Sterling (GBP) last week.
The Norwegian Krone to Pound Sterling (NOK/GBP) exchange rate advanced to a session high of 0.08461 as last Friday’s manufacturing and consumer price inflation (CPI) data came in better than forecast. The Scandinavian currency was also supported by a rise in world oil prices.
According to the Oslo based Statistics Norway, manufacturing output in the Scandinavian nation dropped by 0.5% from December 2014 to February 2015 compared to the previous three-month period.
Industrial production, however, increased strongly on both a monthly and annual basis. Month-by-month, production rose by 2.6%, a strong reversal from the -3.0% figure recorded in the preceding month and bettering economists’ forecast for a dip of -0.5%. On an annual basis, production rose by 1.9%.
Also supporting the Norwegian currency was the release of domestic Consumer Price Inflation (CPI) data. The CPI index rose by 0.3% on a month on month basis and improved to 2% on an annual basis. A rise in the sale of clothing and footwear was the main cause of the increase.
Today, oil prices rose to extend the preceding weeks run of gains. Crude prices rose by 79 cents to trade in the region of $58 per barrel. The rise in prices was down to a drop in the number of US oilrigs in operation and easing expectations that Iranian oil would return to the markets soon.
Looking ahead to the rest of the week, the Norwegian Krone is forecast to experience light trading due to a lack of market moving domestic data.
The only domestic report of interest will be Wednesday’s balance of trade data. Economists forecast that Norway’s trade surplus widened from February’s figure of NOK21 billion to NOK23.2 billion. Aside from that, the currency’s movements will be influenced by events from elsewhere and any fluctuations in oil prices.
The Pound Sterling, meanwhile, was under pressure from concerns over the May 7 general election. With no clear winner expected, economists are worrying that a sustained period of political uncertainty could be the consequence.
The currency is likely to experience movement on Tuesday due to the release of March’s inflation data. Also of interest, this week will be Friday’s UK unemployment and average claimant’s reports.
As the European session progressed on Wednesday the Norwegian Krone to Pound Sterling exchange rate was trading in the region of 0.0843.