Pound to Norwegian Krone (GBP/NOK) Exchange Rate Slips from Week’s Best amid BoE Comments

Pound to Norwegian Krone Exchange Rate Volatile as Both Currencies Strengthen

Despite a lack of impressive UK ecostats this week so far, weakness in rival currencies has made it easier for Sterling (GBP) to gain and the Pound to Norwegian Krone (GBP/NOK) exchange rate has trended higher. The pair is slipping from highs this morning.

The Norwegian Krone (NOK) has been strong lately, and last week saw it push GBP/NOK lower. GBP/NOK fell from the interbank level of 11.79 to 11.74 throughout the week.

This week, GBP/NOK’s movement has been even more volatile. GBP/NOK briefly touched on a low of 11.61 earlier in the week, the pair’s worst level in half a month.

However GBP/NOK has since strongly rebounded from those lows. At the time of writing, GBP/NOK has slipped slightly from this morning’s weekly highs but still trends relatively high in the region of 11.79.

Markets now await more central bank news, as well as any potential coronavirus developments of course.

Pound (GBP) Exchange Rates Jittery amid Bank of England (BoE) News

The Pound (GBP) had been benefitting from rival weakness for much of the past week. However, its movement has become more volatile again since yesterday.

Yesterday saw many key Bank of England (BoE) officials make comments on Britain’s outlook. Notably, policymakers seemed less optimistic on Britain’s economy and the coronavirus pandemic than they did in the bank’s August policy decision.

Five of the BoE’s nine policymakers made speeches yesterday. Markets are currently awaiting another speech from BoE Governor Andrew Bailey expected to be held later today.

Analysts said the speeches would likely keep negative interest rates in the minds of markets.

Still, some analysts believe Sterling still being relatively weak means that it could climb higher. According to Kit Juckes, Macro Strategist at Societe Generale:

‘Sterling remains very weak in real effective terms which means it can only go down with the help of big short positions’

Norwegian Krone (NOK) Exchange Rates Remain Appealing

Investors continue to buy the Norwegian Krone (NOK), though its appeal has been a little more mixed this week.

Norway’s most recent data has not been strong enough to further bolster Krone demand, but the currency outlook has been strong overall. The Krone is still benefitting from rising oil prices, due to oil being one of Norway’s notable exports.

Yesterday’s Norwegian current account report showed the surplus narrowing more than expected. This may have made it easier for GBP/NOK to hit weekly highs.

However analysts predict the Krone will remain appealing. According to Analysts at Deutsche Bank:

‘A weakening pressure on the USD and the fact that the most important central bank for global monetary conditions now clearly signals a willingness to overheat the economy short-term bode well for commodity and inflation-sensitive currencies like the NOK.’

Pound to Norwegian Krone (GBP/NOK) Exchange Rate Awaits BoE Governor Speech

Most of this week’s most notable UK and Norwegian news has come and gone, with little major impact on the Pound to Norwegian Krone exchange rate.

This afternoon, Bank of England (BoE) Governor Andrew Bailey will hold a speech. Markets will be paying close attention for signs of potential tone shifts for the bank. Bigger concerns over the coronavirus pandemic could weigh on the Pound’s recent gains.

BoE news and coronavirus speculation is likely to drive Sterling for the remainder of the week. Friday’s UK car sales and construction PMI data are unlikely to be hugely influential for the British currency.

As for the Norwegian Krone (NOK), investors will be reacting to the movement of the US Dollar (USD). Potential coronavirus developments in Norway could also cause movement.

Looking ahead to next week, key Norwegian datasets and UK growth stats could influence the Pound to Norwegian Krone (GBP/NOK) exchange rate.

Josh Jeffery

Contact Josh Jeffery


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