GBP/NOK Exchange Rate Rangebound as Norges Bank Holds Interest Rates at Record Lows
The Pound to Norwegian Krone (GBP/NOK) exchange rate held steady this morning, with the pairing currently trading around 11.646kr.
The Norwegian Krone (NOK) held steady this morning after Norway’s Central Bank held its interest rates at a record low at 0%. The Norges Bank also said that the economy was developing in line with expectations.
Terje Solsvik, an analyst and reporter of Nordic news at Reuters, commented:
‘Norges Bank cut rates three times from March to May as it sought to cushion the economy from the effects of the COVID-19 pandemic, but said in June that its prospects were improving faster than expected.’
However, NOK investors are remaining cautious after Norway’s wealth fund – the world’s largest – was reported to have made a £16 billion loss in the first half of this year owing to market volatility that the coronavirus.
Trond Grande, the deputy chief executive of the wealth fund, commented:
‘We have already seen some sort of V-shaped recovery in the financial markets. I think there is a slight disconnect between the real economy and the financial markets.’
Pound (GBP) Steady as Doubts Grow Over September UK-EU Post-Brexit Trade Deal
Sterling held steady against the Norwegian Krone (NOK) today despite growing hopes over a possible UK-EU post-Brexit trade deal being secured next month. This follows comments from Downing Street that it was seeking to secure a deal in September.
However, these hopes were tempered by comments from Michel Barnier, the European Union’s chief negotiator. Mr Barnier said that the UK had failed to show a ‘willingness to break the deadlock’ over difficult issues.
Meanwhile, David Frost, the UK’s chief negotiator, said that the EU had failed to honour ‘fundamental principles which we have repeatedly made clear’. Consequently, GBP investors have remained cautious as UK-EU differences continue to hinder trade talks.
In UK economic news, today will see the release of the GfK consumer confidence figure for August. Any improvement in Britain’s consumer morale would prove Pound-positive.
GBP/NOK Forecast: Could Positive UK Economic Data Buoy Sterling on Friday?
Pound (GBP) traders will be looking ahead to tomorrow’s release of the flash UK Markit services PMI for August. If this confirms consensus and rises from 56.5 to 57, then we could see the GBP/NOK exchange rate rise.
Tomorrow will also see the release of the latest UK retail sales report for July. Any improvement would prove Pound-positive.
The GBP/NOK exchange rate could edge higher towards the end of this week if UK economic data convinces markets of the nation’s economic recovery from the coronavirus pandemic.