As GBP’s impressive rally continued, the Pound recorded impressive great gains against the Norwegian Krone today and yesterday.
A surge in support for the pro-EU camp has seen the Pound attain some of its most significant one-day gains since the 2008 world banking crisis. Following the shocking and regrettable murder of Labour MP and ‘Remain’ proponent Jo Cox, suspended campaigning saw pro-EU sentiment thrive in the absence of the ‘Leave’ campaign.
Public figures coming out in support of the EU have lent their weight to the argument as familiar faces hit much harder than facts in the public psyche.
The Pound Danish Krone exchange rate started out at a low of 11.6686 last Monday and failed to find any permanent gains until the knock-on effect of Thursday’s distressing events.
Oil Prices Keep Krone Pressured
Early week risk-off sentiment saw the Krone weaken while being helped down by last week’s falling oil prices.
Referendum concerns were at a high point during the opening days of last week as polls were pointing towards a Brexit with the ‘Leave’ camp at a six point lead over ‘Remain’. As a result the Pound struggled to make any real gains what-so-ever as any negative reports placing pressure on the Krone were outweighed by the significant Brexit pressure on Sterling.
Being heavily commodity-correlated, the Norwegian Krone had suffered as a result of oil prices tumbling as ‘black gold’ is a very lucrative export for the affluent Nordic country. As a result the Krone felt an approximate 1% drop.
By the end of Wednesday the GBP/NOK exchange rate closed at 11.9274 after just enjoying a small bump thanks to oil’s slump.
Tragic Turning Point for Sterling
After news of Jo Cox’s shocking murder had time to take effect, the recent growing support for the ‘Remain’ Campaign saw an even bigger boost as both sides of the debate suspended campaigning in a mark of respect for the fallen lawmaker.
In the absence of active campaigning by the ‘Leave’ crowd, the stirring ‘Remain’ sentiments allowed themselves to foster and actually managed to eke out a lead in the polls. As a result the Pound saw some massive gains last week, initially launching the GBP/NOK rate up to 11.9325 from 11.7483 before Thursday’s session ended.
Last Friday showed a similar picture with the pairing continuing to climb in the Pound’s favour.
Yesterday the pairing took a small knock as oil prices spiked, pushing the balance towards the Krone, but any movement was short lived as nothing could affect the Pound’s unrelenting rise thanks to even more ‘Remain’ support bubbling up.
GBP/NOK continued to rise today thanks to both falling oil prices and a massive list of figureheads vocally supporting the UK’s place within the Union. If sentiment stays as it is we could expect to see this trend go further.
Future Holds Only the Results of the Referendum
The week’s reports leave much to be desired as both countries have little in the way of upcoming impactful ecostats.
Regardless, the data would be unlikely to have much effect in the shadow of Thursday’s UK Referendum.
Norway’s central bank is set to announce whether it will be altering rates this Thursday. 14 out of 15 analysts surveyed by Bloomberg state the bank is unlikely to but Governor Oeystein Olsen has not ruled out further measures as they appear to have saved Norway’s economy in the past.
Anything past that is utter guesswork as we await the consequences once the vote on Thursday is over.
Results are pegged for release on Friday Morning at 7:30am BST.