A much worse-than-expected result for UK sales data has triggered a modest Pound to Norwegian Krone slump today.
The Confederation of British Industry’s (CBI) distributive trade data for October fell from 42 points to -36, much lower than the expected 15 point reading.
Commenting on the results, CBI Chief Economist Rain Newton-Smith said;
‘It’s clear retailers are beginning to really feel the pinch from higher inflation.
While retail sales can be volatile from month to month, the steep drop in sales in October echoes other recent data pointing to a marked softening in consumer demand’.
Brexit Uncertainties Create Headwinds for GBP Exchange Rates
Another factor dragging on the Pound today has been the fear that MPs won’t be able to vote on the final Brexit deal before the UK leaves the EU.
These concerns come after ambiguous comments from Brexit Secretary David Davis about whether MPs would get a chance to vote on the matter.
There were later clarifications from Downing Street and PM Theresa May, but the disparity in outlook still unsettled GBP traders.
Norwegian Krone (NOK) Weakened as Norges Bank Leaves Interest Rates Untouched
While the Norwegian Krone was able to make minimal gains against the Pound, NOK recorded losses elsewhere because of Norges Bank news.
The central bank left interest rates at 0.50% in October, as expected.
However, the bank did state that predicted risks and the economic outlook have not changed significantly, which implies lower interest rates will be in place for longer.
While separate data showed that Norwegian unemployment fell from 4.2% to 4.1% in August, this wasn’t enough to trigger a NOK rally.
Pound could Bounce Back on BoE Interest Rate Hike Next Week
Looking ahead to next week, the Pound may rally against the Norwegian Krone on 2nd November.
The Bank of England (BoE) will be announcing its much-awaited interest rate decision then and some believe there is a firm chance of a rate hike.
Such an action might send the Pound soaring.
The next Norwegian news, retail sales in September, is due out on 30th October and forecasts are for an improvement on the month and the year.