Pound Sterling Norwegian Krone (GBP/NOK) Exchange Rate Slips as Oil Prices Firm
The Pound Sterling Norwegian Krone (GBP/NOK) exchange rate slumped by around -0.9% today. This left the pairing trading at around 12.8881Kr.
The Norwegian Krone was offered an upswing of support after oil prices firmed following talks about stabilising energy markets between the US and Russia were agreed upon.
The agreement of talks between US President Donald Trump and Vladimir Putin caused benchmarks to rise from 18-year lows.
While oil futures are seeing a recovery the coronavirus pandemic remains the main catalyst for market movement and continues to weigh on oil demand.
Added to this, the Krone received some support after the World Health Organization (WHO) said the coronavirus outbreak in Europe would begin to stabilise soon.
China’s upbeat PMI data also provided some support, and according to City Index’s Fiona Cincotta:
‘Chinese factory data overnight gave a flicker of hope that the world’s second largest economy is firing back up, despite large parts of the world grinding to a halt. Comments by the WHO that the coronavirus outbreak in Europe may be approaching its peak is also boosting sentiment and comes as Italy sees the smallest number of new cases in two weeks.’
Pessimistic British Consumers Send Sterling (GBP) Lower
The Pound slumped against the Norwegian Krone after data from Lloyds Banking Group Plc showed that business confidence slumped this month.
Around 75% of firms surveyed said they were already suffering due to the coronavirus pandemic, or expected to be.
The survey also underestimates he scope of the economic impact as it closed a week before the Prime Minister announced the UK would go into lockdown.
Meanwhile, further data shows that consumers were pessimistic this month. Households were less confident in their finances and the overall economy.
Commenting on today’s data, client strategy director at GfK, Joe Staton said:
‘This research was carried out during the first two weeks of March, when the coronavirus was headline news but not impacting day-to-day lives. Lockdown Britain can only expect further deterioration.’
Q4 2019 UK Economic Growth Stagnates
Further data from the Office for National Statistics (ONS) revealed economic growth in the UK stagnated in the final three months of last year.
This implies December’s General Election failed to buoy British economic growth as expected, despite earlier data suggesting the economy had begun to pick up.
Commenting on this morning’s data, Rob Kent Smith of the ONS noted:
‘Growth in services was offset by a drop in construction and yet another fall in manufacturing. Household spending also saw no growth in the last three months of the year while business investment continued its recent weak path, with a decline at the end of 2019.’
Pound Norwegian Krone Outlook: PMI Data in Focus
Looking ahead, the Pound (GBP) could suffer further losses against the Norwegian Krone (NOK) following the release of UK manufacturing PMI data.
If Markit reveals that the manufacturing sector has slumped further into contraction than expected in March, Sterling will slide.
Meanwhile, if oil prices continue to edge higher, this will send the Pound Norwegian Krone (GBP/NOK) exchange rate lower.