Oil Worker Strike hits Norwegian Krone: (GBP/NOK) Exchange Rate News

US-UK Trade Warning from President Trump Fails to Dent GBP/NOK Exchange Rate Gains

The Pound (GBP) has advanced against the Norwegian Krone (NOK) today, although this is more down to NOK weakness than any supportive demand for Pound Sterling.

The UK currency is recovering from recent remarks by US President Donald Trump, who suggested that Theresa May’s ‘soft Brexit’ plans would prevent the UK from obtaining a trade deal with the US.

There are hopes that Mr Trump could rein in his remarks later today, but for the time being the ultimatum of soft Brexit or no US trade deal has limited GBP/NOK exchange rate gains.

Norwegian Oil Worker Strike Drags NOK/GBP Exchange Rate Down on Economic Damage Fears

While the Pound (GBP) has been battered by President Trump’s recent remarks, the Norwegian Krone (NOK) has been the weaker currency today due to domestic issues.

Workers on Norwegian oil rigs have been taking strike action since Tuesday over a disagreement regarding pension rights and wage disparities.

This doesn’t currently threaten Norway’s crude oil production, but it is still a major upset to one of the nation’s biggest sectors.

More oil workers are threatening to join the strike if their demands are not met, so the situation could get worse before it gets better and has the potential to cause further NOK exchange rate losses.

Highlighting why this is such a major problem for Norway, Maersk Drilling Norge Managing Director Jakob Korsgaard said:

‘The consequence of failed negotiations is to throw an industry already under tremendous pressure into a destructive conflict that will cause great damage to its reputation, its economy, and not least to jobs in the sector.’

Pound Sterling to Norwegian Krone Exchange Rate Forecast: Likelihood of GBP/NOK Gains on UK Jobs Data

The Pound (GBP) could extend its recent advance against the Norwegian Krone (NOK) in the coming week, when high-impact UK jobs market data is released on Tuesday.

The raft of data will include May’s reported unemployment rate, as well as measures of average earnings growth during the same month.

Current forecasts are for the pace of wage growth to accelerate, with and without bonuses included.

Although such news could boost the Pound, a rise in the jobless rate from 4.2% to 4.3%, as some forecast, might limit any GBP/NOK exchange rate gains.

Beyond the employment and earnings stats, the GBP/NOK exchange rate could also be moved by Wednesday’s inflation rate figures.

A forecast-matching rise in the inflation rate during June might cause midweek GBP/NOK exchange rate gains.

This is because, combined with faster wage growth, the result would put more pressure on the Bank of England (BoE) to consider a near-term interest rate hike.

Adam Solomon

Adam joined the team at TorFX soon after graduating from University in 2005 with a degree in Journalism. Since then Adam has advanced to become both Head of Trading and Head of Treasury. His keen interest in the currency market and knowledge of what drives exchange rates makes him perfectly positioned to produce regular market updates focused on the movements of the major currencies.

Contact Adam Solomon