The Pound Norwegian Krone (GBP NOK) exchange rate rallied this morning as data showed that UK home loans approvals rose faster than expected last month.
Pound (GBP) Climbs as Mortgage Data Beats Expectations
The Pound was propelled higher against the Norwegian Krone this morning as data released today suggested that the UK’s housing market is in better shape than expected.
According to figures released by the British Banker’s Association (BBA), UK mortgage approvals climbed from 41,644 to 41,807 in August, outpacing expectations of a rise to 41,700 and rising 11% annually.
The BBA’s report showed that the UK housing market was slowly beginning to rebalance, with activity picking up in the north as buyers move away from the pricier and more densely populated regions around London and the south east.
Accompanying data also revealed that mortgage lending held steady at around £24.2bn last month, leaving it close to the monthly average in 2017 although it did show that consumer borrowing from high street banks had slowed in August, falling from 1.9% to 1.5%.
Norwegian Krone’s (NOK) Losses Slowed by Surge in Oil Prices
With little in the way of domestic data, the Norwegian Krone’s resilience today was tied to the sharp rise in oil prices overnight as Brent Crude pushed over $59 a barrel, its highest level in over two years.
Christin Tuxe, Chief Analyst at Danske Bank said;
‘We will not receive any important news about the Norwegian economy before Friday’s labour market and retail sales data. Until then, NOK is likely to be in the hands of oil prices.’
The jump in crude markets was largely prompted by threats from Turkish President Tayyip Erdogan to cut off the pipeline that carries oil from Iraqi oil fields to the Turkish port of Ceyhan.
The move is in reaction to the unofficial independence referendum recently held by the autonomous Kurdistan Regional Government of northern Iraq.
With Reuters reporting that the pipeline usually transports between 500,000 and 600,000 barrels of oil per day from Iraq to the outside world, analysts are suggesting that any disruptions could have a major impact on global stock levels.
Moreover, the advance in crude today was aided by speculation of further production cuts from OPEC, with analysts suggesting that than extension of the cartel’s output cuts could help prices stabilise close to current levels.
Will Improved Retail Figures Support the Pound?
Looking ahead, the GBP NOK exchange rate may advance even further tomorrow as the Confederation of British Industry (CBI) releases is latest retail statistics, with economists forecasting that its distributive trade index may have rebounded from -10 to 5 in September.
Meanwhile, the Norwegian Krone may attempt to mount a recovery on Wednesday morning as the domestic unemployment rate is expected to have fallen from 4.3% to 4.2% in July, matching the two year low struck in January.