GBP/NOK Exchange Rate Sinks as Norway’s Covid-19 Fears Ease
The Pound to Norwegian Krone (GBP/NOK) exchange rate plummeted by -1.2% today after Norway’s Health Minister, Bent Høie, said that the nation’s coronavirus epidemic was now ‘under control’. The pairing is currently trading around 12.582kr.
Norway’s reproduction rate of the disease has now plummeted to a mere 0.7 – down from the previous 2.5 – after containment measures were introduced in mid-March.
The Norwegian Krone (NOK) reacted positively to the news, with the Norwegian Government now waiting until Wednesday until it unveils its next steps. This will likely include addressing whether nurseries and schools will be re-opened beyond mid-April.
Today’s release of the Norwegian Unemployment Rate, which showed an increase of 15.4% – its highest on record – left the Norwegian Krone to Pound exchange rate relatively unmoved.
Instead, investors continued to breathe a sigh of relief on signs that Norway’s coronavirus epidemic seems to be under control.
Analysts at Reuters commented:
‘Although many job cuts were classified as temporary, such as restaurants and airlines expecting to bring back employees when restrictions are eventually lifted, economists have warned that many firms may in fact struggle to recover.’
Meanwhile, we could see the Norwegian Krone’s gains drop as Norway’s economy, which is major oil and gas producer, is beginning to suffer from dropping prices of crude, its primary export.
The Pound (GBP) Sinks Despite Boris Johnson’s ‘Stable’ Condition
The Pound (GBP) failed to rise against the Norwegian Krone (NOK) despite news that Prime Minister Boris Johnson’s condition is ‘stable’ after he was admitted to intensive care last night.
Sterling has, however, struggled since the number of coronavirus-related deaths has increased.
The NHS said in it statement today:
‘A further 758 people, who tested positive for the coronavirus (Covid-19) have died, bringing the total number of confirmed reported deaths in hospitals in England to 5,655.’
‘Patients were aged between 23 and 102 years old. 29 of the 758 patients (aged between 23 and 99 years old) had no known underlying health condition.’
Meanwhile, the UK’s Halifax House Prices rose to a higher-than-expected 3%, leaving some investors jittery as buyers and sellers are likely so stall activity as the coronavirus crisis wracks the British economy.
Liam Bailey, Global Head of Research at Knight Frank, commented:
‘While we expect a revival in activity to continue, with volumes next year expected to be 18 per cent above the level seen in 2019, this expansion in sales in 2021 will not fully offset the losses seen this year.’
‘Meaning that of the nearly 526,000 sales we expect to be ‘lost’ due to lock down this year, less than half will be carried into 2021.’
GBP/NOK Forecast: Could Norway’s Core Inflation Figure Boost NOK?
Norwegian Krone (NOK) investors will be awaiting tomorrow’s release of Norway’s Core Inflation report for March. Any signs of improvement would further be bolstering the NOK/GBP exchange rate.
Additionally, if the Norwegian Government relaxes its nationwide restrictions to prevent the spread of the coronavirus, we could see the Norwegian Krone edge higher as Covid-19 fears diminish.
The GBP/NOK exchange rate will be dictated by further announcements on the state of PM Boris Johnson’s health. Any improvement in his condition would lend the Pound some support as the UK’s figurehead would be set to return to normal duties.