The Pound managed to gain against the Norwegian Krone this week, though elsewhere the UK currency has still failed to recover from last Friday’s catastrophic ‘flash crash’.
The Krone has been struggling against the Pound and has also seen a decline against the US Dollar (USD) and a middling performance against the Euro (EUR).
Last week saw the Pound begin trading against the Krone in the region of 10.32, only to give way to a closing low of 9.97 on Friday after the day’s events.
Pound Tumbled on Friday’s ‘Flash Crash’
The latest movements for the Pound have been relatively unimpressive, on account of continued negative investor sentiment following last Friday’s alarming dive for the UK currency.
The cause of the so-called ‘flash crash’ has not yet been determined, but its repercussions on the Pound are still being seen this week.
On Monday, poor opinions of the UK economy were further reinforced due to PM Theresa May, who stated that UK MPs would not be able to vote on modifications to ‘Brexit’ terms.
More recently, concerns have been voiced by Bank of England (BoE) officials that the UK financial sector may be unable to cope with high-profile companies mobbing out of the country due to ‘Brexit’ concerns; coincidentally, Citi UK and Morgan Stanley International heads both voiced warnings to this effect shortly afterwards.
Norwegian Krone Rocked by Ongoing Oil Price Fluctuations
Although the Krone should have been able to jump against the Pound, the Norwegian currency has actually been unable to make much in the way of positive movement owing to commodity news.
The cost of Brent crude has recently been on an upwards trajectory, due to signs that a recent OPEC meeting on limiting oil production may finally bear fruit.
This increased the value of the Krone due to Norway’s oil exports potentially receiving a boost in value; the situation was further helped when Russian President Vladimir Putin voiced support for Russian oil freezing.
However, the cost of the commodity has since dipped along with the Krone, owing to recurrent fears that no actual change will be made by OPEC members, despite the apparent willingness of member nations.
In domestic news, Norway’s inflation has risen in September on the month, but conversely fallen on the year.
GBP/NOK Exchange Rate Forecast
Looking ahead, Pound Sterling/Norwegian Krone exchange rate movement could take place when the annual UK construction output results for August arrive on Friday, as well as when the Norwegian trade balance stats for September come on Monday.
With the UK data, a shift is expected on Friday morning from -1.5% to -1.1%.
With Norway’s contribution, a trade surplus expansion from 6.8bn to 9.6bn is expected.