The GBP NOK exchange rate has performed poorly during the first week of 2017, not least because of the unexpected resignation of the UK’s Ambassador to the EU.
Norwegian news has been comparatively thin on the ground, but this hasn’t prevented the buoyant NOK from having a strong start against the Pound on the back of fishery news.
Since January 1
st
, the Pound has progressively worsened against the Norwegian Krone, sliding from a starting high of 10.67 to a low on January 4
th
of 10.57.
Pound Norwegian Krone Update: GBP Weakness comes despite Surprising UK PMIs
The Pound has been dealt a mixed hand during the first week of the year, with supportive domestic data clashing against a less-than-positive development within the Civil Service.
In the former case, Tuesday and Wednesday have both seen their respective manufacturing and construction PMIs exceed forecasts, giving December 2016 a positive send off in economic terms.
More recently, however, Sir Ivan Rogers, the UK Ambassador to the EU, has resigned, citing irreconcilable differences with the Government over Brexit negotiations.
The news comes at a crucial time for the Government, which could be mere weeks away from triggering Article 50 to begin exiting the EU.
Losses against NOK have been consistent, with a sharp downwards spike being seen after Sir Ivan’s announcement.
Norwegian Krone Pound Trading Improves on Manufacturing and Salmon News
While oil prices have proved disappointing in Norway over the past weeks, the Krone has still remained stable against the Pound.
Positive news has included the NIMA manufacturing PMI for December, which jumped dramatically from 47.8 points to 51.4, as well as record sales of Norwegian salmon in 2016; the key figures were an approximately 65.3bn Kroner sale total, as well as a 31% increase compared to 2015.
GBP/NOK Exchange Rate Forecast
Looking ahead, one of the big UK announcements to watch out for will come from the Supreme Court, which has been considering a Government appeal on Article 50 over the Christmas period.
The appeal has been that the Government, not Parliament, should have express authority to trigger Article 50 when the UK is ready to leave the EU; the Government initially lost this privilege in November 2016 during the first court ruling.
The Supreme Court verdict is due sometime in January and if the Government wins back ‘triggering rights’, then the Pound is likely to flop against NOK due to returning fears about a rapid and economically damaging exit from the EU.
Conversely, a second shut-down of Government authority may well raise GBP demand, as it is expected to bring a softening of the official stance on leaving the EU, potentially to the point of keeping single market access at the cost of allowing the free movement of people into the country.
On the Norwegian side of proceedings, further announcements are due on January 6
th
and January 10
th
, covering national production and inflation respectively.
In the former case, Friday’s industrial and manufacturing production results are expected to have fallen in November, while Tuesday has a monthly rise but annual drop in December inflation expected.
Later in the month, Norwegian Central Bank Governor Oystein Olsen is due to give a much-anticipated speech at the Oslo Stock Exchange on January 18
th
.