The Pound Norwegian Krone exchange rate has seen significant fluctuations this week due to a period of Bank of England (BoE) based volatility and North Sea oil prices.
Pound Sterling Unsettled after BoE’s Carney Announces 2019 Leaving Date
Monday’s GBP/NOK movement was dominated by one main issue – when BoE Governor Mark Carney would be leaving the central bank.
Among the theories on offer was the Carney would soon be quitting the BoE due to government pressure, that he would end his term in 2018 or that he would extend his tenure to 2021.
Carney himself answered these questions on Monday evening by picking 2019 as his leave date, which was largely considered a compromise by economists.
However, as 2019 is when the UK is set to finally leave the EU, it remains to be seen how much guidance Carney will offer during such a crucial year for the UK.
Elsewhere, further GBP instability has been caused by Tuesday’s UK manufacturing PMI dipping from 55.5 to 54.3.
Norwegian Krone Destabilised as Brent Crude Prices Remain Inconsistent
As is typical of the Norwegian Krone, NOK has been deeply unsettled by Brent crude costs so far this week.
Since mid-October’s dive in Brent costs from over $53 per barrel to around $46 at the start of November, the cost of the commodity has risen fractionally to almost $49.
In spite of this seemingly positive movement, however, the average Brent price for 2016 remains at $44 per barrel, which could spell future misery for the Krone on additional price declines.
Elsewhere in Norway, the NIMA manufacturing PMI for October has remained static at 52.7, instead of dropping to 52.2 as forecast.
GBP/NOK Exchange Rate Forecast
For the rest of the current week, Pound Sterling/Norwegian Krone exchange rate movement may occur as a result of Wednesday and Thursday’s UK construction and services PMIs, as well as Thursday’s noon glut of BoE announcements.
From Norway, Friday will bring another speech from Oystein Olsen; his first came on Tuesday and focused on sticking to national inflation targets to determine future policy measures.
The major BoE announcements will include an interest rate decision and any adjustments on quantitative easing, both of which are forecast to see no change.
The usual press conference that follows the announcement, given by Carney, is expected to draw the most focus, as an official confirmation of his actual term length may well trigger significant unrest among GBP investors.