Pound to Norwegian Krone Holding Near Best Levels as Oil Prices Weigh on NOK
Worsening concerns over the global spread of the coronavirus have yet to hit the Pound (GBP), and the Pound to Norwegian Krone (GBP/NOK) exchange rate continues to strengthen. The Norwegian Krone (NOK) is struggling to find support despite strong domestic data.
The Krone’s broad weakness meant that last week’s GBP/NOK losses were limited. The pair only slipped slightly. to the interbank region of 12.02.
Since markets opened this week though, GBP/NOK has already recovered all of last week’s losses and then some.
GBP/NOK even touched on a high of 12.21 yesterday – the best level for the pair since the 2016 Brexit vote. At the time of writing, the pair trends closer to the interbank region of 12.19.
Coronavirus jitters could continue to pressure the Norwegian Krone in the coming days. Upcoming Norwegian data may be influential as well.
Pound (GBP) Exchange Rates Focused on Brexit with Coronavirus Jitters Yet to Hit
Many major markets are becoming increasingly concerned about the coronavirus. The outbreak has been spreading in China and now parts of Europe.
However, the Pound (GBP) has thus far avoided coronavirus panic. Concerns of the virus hitting Britain have not yet risen like Eurozone and US coronavirus fears have.
Instead, Pound investors remain focused on movement in rival currencies, as well as Brexit.
The Pound benefitted from weakness in both the US Dollar (USD) and Euro (EUR) yesterday. On top of this, EU officials indicated that they hoped to achieve a wide-ranging partnership with the UK in upcoming Brexit negotiations.
Negotiations are set to finally begin next week. Speculation over whether relations will improve or worsen, have kept the Pound’s movement jittery and limited in recent weeks.
Norwegian Krone (NOK) Exchange Rates Fail to Benefit from Strong Norwegian Data
Attempts for the Norwegian Krone (NOK) to advance in recent sessions have largely failed to materialise.
Instead, concerns over the global spread of the coronavirus Covid-19 are growing and are hitting oil prices hard. NOK is a currency often correlated to oil prices, so oil price weakness has led to broad NOK losses.
Even a brief recovery in oil prices since yesterday has not been enough to support the Norwegian Krone. The overall outlook for the currency is gloomy amid coronavirus jitters and a lack of particularly strong domestic news.
Investors largely brushed over today’s Norway’s unemployment rate data. Norwegian unemployment unexpectedly improved from 4.0% to 3.9%, but this was not enough to boost demand for the Norwegian Krone.
Pound to Norwegian Krone (GBP/NOK) Exchange Rate Remains Focused on Covid-19 despite Upcoming Data
There are more notable Norwegian ecostats due for publication over the coming days.
Norwegian retail sales from January will be published tomorrow, with loan growth and unemployed persons data due on Friday.
However, unless these stats have a notable impact on Norway’s economic outlook, Norwegian Krone (NOK) movement may not be significantly impacted.
Instead, the trade-correlated Krone will continue to be driven by developments in the coronavirus and oil prices.
If outbreak fears worsen or hit oil prices lower, investors won’t have much reason to buy NOK. This could keep the currency under pressure.
The Pound (GBP), on the other hand, is likely to remain driven by rival strength and Brexit developments.
Brexit is likely to come in increasing focus for the Pound to Norwegian Krone (GBP/NOK) exchange rate, as UK-EU negotiations are set to finally begin next week.