The Pound Sterling to Norwegian Krone (GBP/NOK) exchange rate dived by around -0.52% during Thursday’s European session.
In general, the Norwegian Krone weakened versus its major peers over the past week. The depreciation can be attributed to crude oil prices falling significantly. The drop in crude prices was the result of mounting US stockpiles. In addition, the Krone declined significantly in response to Iran finally agreeing on a deal with the US to curb their nuclear activity in exchange for the removal of sanctions on oil production. Iran is set to add a large amount to the global oil supply. Positive domestic data over the past week prevented a large Krone decline, however. June’s Inflation Rate bettered expectations on both a monthly and annual basis. In addition, June’s Trade Balance showed the surplus narrowed less-than-anticipated.
During Thursday’s European session, the Krone advanced versus its major rivals. The appreciation was the result of oil prices edging higher. However, crude prices still remain close to a three-month low and could resume bearishness at any point. Oil prices edged higher thanks to a knee jerk reaction to the Iran nuclear deal and falling US stockpiles. In addition to rising oil prices, the Krone appreciated thanks to easing tensions regarding the potential for a Grexit and optimism from the European Central Bank (ECB) regarding Europe’s economic progress. A better outlook for Europe will see Norwegian trade improve.
The Pound Sterling to Norwegian Krone (GBP/NOK) exchange rate is currently trending in the region of 12.6710.
Looking ahead, Norwegian Krone trade is likely to be dominated by oil price fluctuations. The geopolitical situation in Europe is also likely to impact demand for the Norwegian asset. In terms of domestic data over the coming week; Retail Sales, Unemployment Rate, Business Confidence and the NIMA Manufacturing PMI will all be of interest to those invested in the Norwegian Krone.
For those trading the GBP/NOK exchange rate, the British asset is forecast to strengthen by UBS strategists, who see recent positive sentiment regarding rate hikes from the Bank of England (BoE) as a sign of a near-future benchmark rate increase. There is also little concern regarding the UK’s low inflation rate given that the BoE stated that inflation is set to pick up towards the end of the year.
The Pound Sterling to Norwegian Krone (GBP/NOK) exchange rate was trending within the range of 12.6141 to 12.7964 during Thursday’s European session.