The current week has seen the Pound Sterling to Norwegian Krone (GBP/NOK) exchange rate rise steadily, although the Pound’s path to superiority has been marked by a few depreciative dips.
At its high point, the Pound has hit 13.1669 against the Krone today, a rate not bettered since mid-December last year. While a number of domestic economic publications effecting the Pound have come out since the New Year began, the specific rise against the Krone is actually more likely to have been caused by the plummeting price of crude oil.
Although the price of the precious Norwegian (and global) commodity was in a state of flux over the latter half of the previous year, today has seen a new low for the price of crude oil per barrel, which has broken records to come in at around $34.65, the lowest price on record in over 10 years.
Norway has also been harmed by its sole domestic data release of 2016 so far – the NIMA Manufacturing PMI for December fell further into contraction from 47.5 to 46.8.
On the UK side of things, the Pound opened with a weak start to the year after the December Manufacturing PMI fell from 52.5 to 51.9. However, Monday’s movement was balanced overall by both November Mortgage Approvals and Net Consumer Credit figures rising on previous printings.
Yesterday, Sterling was pushed back up in the eyes of investors when the Markit/CIPS Construction PMI for December was released; it exceeded forecasts by rising from 55.3 to 57.8 instead of merely meeting forecasts at 56 points.
Today has seen a further mixed outcome from the UK results of the day, as while the Composite and Services PMIs for December have both declined on prior results, the nation’s Official Reserves in the same month have nonetheless risen from -$1394m to $527m.
For the remainder of the week, Pound Sterling/Norwegian Krone exchange rate movement may occur as a result of Friday morning’s monthly and yearly Norwegian Industrial Production results, that nation’s annual Loan Growth as well as the yearly Manufacturing Production. In all cases, November is the month covered by the results.
The last sizable UK data release will come on Friday morning as well, although ahead of this will be tomorrow’s annual December New Car Registrations, which are considered low impact. At the end of the week, the UK Trade Balance printings will be released.
At the time of writing, forecasts were positive for Norway’s Industrial Production figures but less supportive for the nation’s Loan Growth which was expected to decline from 5.7% to 5.6%. With Manufacturing Production, an improvement has been predicted from -8.4% to -3.82%.
No forecasts have been made for the UK’s Car Registrations, but at the time of writing expectations were for an optimistic reduction in the UK’s trade deficit, something that would likely bolster the Pound if accurate.