The past week saw the Pound Sterling to Norwegian Krone (GBP/NOK) exchange rate steadily drop from a high of 12.7667 at the beginning of the week to a low of 12.3539 on Friday; so far this week the Pound has fared poorly, failing to regain the ground lost against the Krone last week.
Last week, the Pound’s detrimental results came early with the September Services and Composite PMIs on Monday; in these key indicators of the UK economy, a drop to 53.3 points was recorded in both fields, something that went against forecasts in both cases.
Wednesday’s data caused some large boosts to confidence in Sterling however, as the UK Industrial and Manufacturing Production results for August mostly showed signs of healthy growth in their sectors, although even this bright spot was dimmed by the annual manufacturing result printing with a -0.8% decline.
A day later, any optimism in the Pound was soon dispelled by Thursday’s Bank of England (BoE) Interest Rate Decision and the accompanying meeting minutes. As per usual, the BoE froze the UK interest rate at 0.50% with a vote of 8-1; even more routine was the voter composition, with Ian McCafferty making up the sole hawk among the nine-member Monetary Policy Committee (MPC). The minutes of the BoE’s decision, however, were the greatest cause for concern, as policymakers were excessively dovish when it came to considering a UK interest rate hike, so much so that some economists pushed their predictions for any kind of interest rate hike all the way ahead to 2017.
Norway’s results last week were of a decidedly better nature, with the nation’s Industrial Production figures rising above forecasts and the Inflation Rate results also posting positively. Surging crude oil prices also increased the appeal of the commodity-driven Krone.
The same cannot be said for the UK, unfortunately. In the only major UK result so far this week, the UK non-core CPI for September posted at -0.1% while the core stat failed to rise to 1.1% as expected. As a result, the Pound has dropped to 12.3895 against the Krone today.
For the rest of this week, Pound Sterling to Norwegian Krone exchange rate movement may occur as a result of the UK Claims, Earnings and Employment data for August (out tomorrow) and the Norwegian September Balance of Trade figure which is due for release on Thursday.
For the most part predictions have been positive for tomorrow’s UK jobs data, particularly with regard to the Jobless Claims Change for September and the Employment Change figure for the 3 months to the end of August. With the former field, a -2.2k claim reduction has been forecast, along with a 140k person rise being predicted for the latter.
With Norway’s only result of the week, a -0.7bn reduction is expected from the previous 20.8bn posting for the nation’s Balance of Trade, moving down to 20.1bn.