Update: GBP/NOK Exchange Rate Improves as Tories Maintain Lead in Major Poll
The Pound Norwegian Krone (GBP/NOK) edged higher today, and is currently trading around 11.875Kr after the influential YouGov MRP poll suggests that Prime Minister Boris Johnson could be heading for a big majority for the 12th December general election.
With markets generally preferring a Tory victory next month, due to expectations that they will resolve Brexit uncertainty, the pound has benefited today.
However, Dominic Cummings, Boris Johnson’s strategist and adviser, warned that the election was “much tighter” than the polls make out, leaving some Sterling traders feeling jittery.
Meanwhile, the Norwegian Krone (NOK) failed to gain on the pound despite today’s release of October’s Norwegian credit indicator figure, which unexpectedly rose by 5.6%.
NOK was compromised, however, by falling oil prices as US-China trade uncertainty continues to weigh on one of Norway’s major commodities.
GBP/NOK Exchange Rate Improves as Sinking Oil Prices Weigh on Norwegian Krone
The Pound Norwegian Krone (GBP/NOK) exchange rate edged higher today, with the pairing currently trading around 11.828Kr after September’s Norwegian unemployment rate figure rose to a worse-than-expected 3.9%.
Falling crude oil prices have also affected market confidence in the Norwegian Krone, with Norway being one of Europe’s leading exporters of oil.
Oil prices fell due to heightened concerns over global economic growth and uncertainty over a US-China ‘phase one’ trade deal.
Stephen Innes, Chief Asia Market Strategist at AxiTrader, commented:
‘Oil traders remain hopeful a trade deal will get signed. Still, the lack of clarity around the [US] tariff rollbacks, which is the key to economic growth and bullish for oil, continues to somewhat cloud sentiment.’
Due to a lack of influential Eurozone and Norwegian economic data until Friday, NOK traders will continue to follow US-China trade developments for any indications of a boost in crude oil prices.
If the world’s two largest economies concede on a ‘phase one’ deal we will likely see the NOK/GBP exchange rate edge higher.
GBP/NOK Exchange Rate Edges Higher, Could Labour’s Rise in the Opinion Polls Weigh on Sterling?
The Pound (GBP) climbed against the Norwegian Krone (NOK) in spite of tightening British opinion polls, with yesterday’s Kantar Poll showing that the Tory lead had fallen from 18 points to 11, while Labour gained an impressive 5 points in just over a week.
Kantar poll pic.twitter.com/Xya0tBxxJL
— John Rentoul (@JohnRentoul) November 26, 2019
A Conservative lead is generally favoured by markets, due to expectations that they will resolve Brexit uncertainty by the end of January, so their sinking favourability in the polls is weighing on the GBP/NOK exchange rate today.
With last night being the final chance to register to vote ahead of the 12th December general election, a surge in young people’s registrations – who are statistically more likely to be pro-Labour – could also provide a potential boost for the opposition party.
Jess Garland, the Director of Research at the Electoral Reform Society, commented:
‘We’re seeing a major uplift in new registrations compared to the last election, with large numbers of young people signing up too – a traditionally under-registered demographic. It’s vital we close the demographic divides in terms of who is registered. This is a strong start.’
GBP/NOK Outlook: UK Political Developments in Spotlight
Norwegian Krone (NOK) investors will be looking ahead to Friday’s publication October’s Norwegian retail sales figure, which is expected to rise from -0.1% to 0.3% and potentially boosting market confidence in the Norwegian economy.
Sterling traders, meanwhile, will be awaiting Friday’s release of November’s UK GfK consumer confidence figure, which is expected to hold steady at -14.
The UK’s political developments will continue to drive the GBP/NOK exchange rate this week, with any signs of the Conservative’s losing ground in the opinion polls ahead of December proving Pound-negative.