The Pound has been a poor option against the Norwegian Krone and virtually all other peers lately, having been shattered by a negative news coming out of the UK at the start of the week.
The Krone has conversely risen steadily against the flagging Pound, thanks in part to recent oil prices and the latest domestic data.
Clearly demonstrating how far the Pound has fallen against the Krone, Sterling started the week off at 11.1415 before dropping to a low of 10.9191
High-Pressure on UK Economy after ‘Brexit’ Boils Over
The Pound has been in a state of decline against the Krone lately, having fallen by -1.1% against the Norwegian currency.
After being granted its first actual data of the week, the Pound was sent reeling by negative result after negative result. June’s trade balance result showed an injurious expansion from -4.2bn to -5.1bn. Worse still were the UK manufacturing and industrial production results, which proved a letdown on optimistic predictions on both the month and the year.
Closing off the UK’s disappointing data has been the National Institute of Economic and Social Research (NIESR) GDP estimate for the three months to the end of July, which has been downgraded from 0.6% to 0.3%.
Adding to this misery elsewhere has been continuing and new rail strike action in the south east, as well as comments from BoE official Ian McCafferty that more monetary policy easing, implying interest rate cuts, could be in store.
Norwegian Krone (NOK) Rates Unsettled
The NOK has been a strong contender against the Pound lately, although in other pairings the turbulent state of national and international affairs has acted as a limiting factor on the ultimate appeal of the Krone.
The cost of crude oil in particular has been a drag most recently, with what had been a steady recovery from under $42 per barrel to around $45.40 petering out.
Domestic data out of Norway has been similarly unsettled. Last week, the opening NIMA manufacturing PMI for July rose from 53.5 to 54.8.
More recently, this was cancelled at the end of the week by the June industrial and manufacturing production results falling on both the month and the year.
Pushing the Krone back up against has been the June loan growth result, which has risen on the year from 4.8% to 4.9%, falling just short of the expected 5% outcome.
Concerning news has recently come out of Norway related to the UK – rumours have been circulating that should Norway feel its position in the European Free Trade Association (EFTA) threatened by UK attempts to join post-‘Brexit’, it could block any such action.
GBP/NOK Exchange Rate Forecast
For the remainder of the present week, Pound Sterling/Norwegian Krone exchange rate movement may take place as a result of Wednesday’s Norwegian July inflation rate and PPI data, as well as Friday’s UK construction output results for July.
For Norway’s contributions, inflation in July is expected to dip from 0.6% to 0.3% on the month and from 3.7% to 3.6% on the year, while an annual shift from 3% to 3.2% is on the cards for the annual core figure. With Norway’s annual PPI for July, a shift from -9.7% to -9.2% has been forecast.
Regarding the other remaining UK release, construction output on the year in June is expected to fall from -1.9% to -2.3%.