The Pound Sterling to Norwegian Krone (GBP/NOK) exchange rate declined from a high of 12.7236 to a low of 12.4587 last week. This has largely been brought about by fluctuating crude oil prices, as well as wavering investor confidence regarding European Union issues.
Carney Calamity Dominated GBP Movement Last Week
The most dramatic UK event of last week took place on Tuesday when Bank of England (BoE) Governor Mark Carney confounded investors by declaring that no UK interest rate increase would take place in the near future. Although Carney had implied that a rate hike was something of a certainty for the beginning of 2016, the policymaker cited adverse internal and external economic conditions as his reason for not following through.
Such an opaque statement came as a shock to investors and sent the Pound into a downward spin against most of its competitors until it finally recovered on Friday.
The most significant UK news today has been the vocal contributions towards both the ‘In’ and ‘Out’ campaigns for the UK Referendum. On the former side, Britain Stronger in Europe leader Stuart Rose has declared that leaving the EU would deprive the UK of the valuable single market available to EU members, with the lack of substitute plan making this choice particularly disconcerting.
However, opponents to the ‘In’ campaign have argued that the statistics supporting this statement are inaccurate.
Norwegian Krone Bolstered by Supportive Oil Prices
With no real Norwegian economic data to speak of last week, the Krone was instead shifted in value by the price of crude oil per barrel. Despite repeated fluctuations, the price became relatively consistent and rose from under $29 to over $31. Despite this, however, events in Europe limited the gains of the Krone due to the European Central Bank (ECB) President Mario Draghi making yet another dovish statement.
With little in the way of impactful Eurozone data today, the Norwegian Krone has again been shifted by the price of crude oil per barrel, which has disappointed investors by falling from over $32.00 to $31.84 today.
In wider events, the Euro has been gradually appreciating due to expectations of a possibly hawkish speech from Draghi.
This Week’s GBP/NOK Exchange Rate Forecast
For the current week, Pound Sterling/Norwegian Krone exchange rate movement may occur as a result of Tuesday’s UK Q4 GDP result and German Consumer Price Indices for January, as well as Thursday’s Q4 Norwegian Business Confidence and Friday’s December Retail sales from Norway.
At the time of writing, forecasts were for a decline from 2.1% to 1.9% for the UK’s GDP, a rise on the year from 0.3% to 0.4% for Germany’s Inflation Rate, a shift from -8 points to -12 for Norway’s Confidence score and a decline on the month and the year for that same country’s Retail Sales results.