Pound to Norwegian Krone (GBP/NOK) Exchange Rate Dips as Hopes for Norway’s Economic Recovery Grow

GBP/NOK Exchange Rate Sinks as Norwegian Economic Outlook Improves

The Pound to Norwegian Krone (GBP/NOK) exchange rate dipped by -0.1% today, with the pairing currently trading around 11.766kr.

The Norwegian Krone (NOK) edged higher against the Pound (GBP) after today’s release of April’s Norwegian Manufacturing Output figure, which improve from -3% to -1.6%. As a result, this boosted hopes for Norway’s quicker-than-expected economic recovery in the months ahead.

Statistics Norway (SSB) said that Norway’s economy will recover faster than expected from the Covid-19-induced recession owning to the country’s early actions to contain the coronavirus.

The SSB said:

‘The infection rate has been reduced faster than expected, the infection prevention measures have been eased to a greater extent and the scope of the financial packages has increased more.’

‘We expect growth to pick up sharply again towards the end of the year and early 2021.’

Meanwhile, the oil-price-reliant Norwegian economy is receiving a boost from rising oil prices as global economies continue to ease their lockdown measures and reopen their economies.

Furthermore, with April being perceived as a low point, the outlook for Norway’s economy is beginning to look brighter.

Pound (GBP) Falls as UK Consumer Morale Sinks in May

The Pound (GBP) eased against the Norwegian Dollar (NOK) following last night’s release of the UK’s consumer confidence survey for May. The figure fell from -34 to -36.

As a result, Sterling investors are becoming increasingly concerned for Britain’s economic strength going into the second quarter.

Michael Hewson, chief market analyst at CMC Markets UK, commented on the survey:

‘With certain sections of the US economy slowly reopening, there is a hope that we could start to see the unemployment rate start to plateau as more and more people return to work after being furloughed.’

Today also saw the release of May’s Halifax house prices figure edge lower in May. This only added to the pessimism over the UK’s economic recovery post-coronavirus.

Russell Galley, Managing Director, Halifax, said:

‘This is the third successive monthly fall, though more modest than in April, and reflects a continued loss of momentum following what was a strong start to the year.’

GBP/NOK Outlook: Could Weak UK Retail Data Drag Down Sterling?

Sterling traders will be looking ahead to Monday’s release of May’s UK BRC retail sales figures. Any signs of deterioration in the UK’s retail sales last month would further weigh on the Pound.

Norwegian Krone (NOK) traders will be looking ahead to Wednesday’s release of Norway’s core inflation data for May. As a result, we could see NOK edge higher if Norway’s economy continues to show improvement last month.

The GBP/NOK exchange rate will continue to remain sensitive to post-Brexit developments next week. Any signs that Downing Street will resist extending the extension period beyond December, then we could see Sterling suffer.

David Moore

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