GBP/NOK Exchange Rate Falls on Stronger-Than-Expected Norwegian Manufacturing Data
The Pound to Norwegian Krone (GBP/NOK) exchange rate fell by -0.2% today, with the pairing currently trading around 11.78kr.
The Norwegian Krone (NOK) edged higher following the release of July’s Norwegian Manufacturing Output, which unexpectedly beat forecasts and rose from 0.2% to 1.8%.
With Norway’s manufacturing sector accounting for the nation’s 27% of total production, this provided some uplift for the Norwegian Krone (NOK).
Yoon Nakstad, an analyst at Statistics Norway, commented on the data:
‘Norwegian manufacturing output saw a solid increase of 1.8 per cent from June to July 2020, according to seasonally adjusted figures. Much of this output growth can be ascribed to a strong development in food and beverages. In the period May-July 2020 there was a significant output decline of 4.2 per cent.’
We could see the Norwegian Krone (NOK) continue to edge higher against its peers as the outlook for the Norwegian economy remains relatively bright compared to some of its European neighbours.
Pound (GBP) Falls as EU Becomes ‘Worried’ About UK’s Approach to Brexit Talks
The Pound (GBP) fell today following news that British Prime Minister Boris Johnson was planning to negate crucial aspects of the Brexit Withdrawal Agreement, including the Northern Ireland protocol.
Consequently, GBP investors have become more concerned about the growing possibility of a no-deal Brexit on December 31st.
Michel Barnier, the European Union’s (EU) Chief Negotiator, also expressed concern, saying that he was ‘worried’ about Downing Street’s new approach to Brexit developments.
Scottish First Minister Nicola Sturgeon also warned that the move would ‘significantly increase’ the likelihood of a no-deal Brexit, and would result in ‘damage to the economy’.
As a result, Sterling has suffered today owing to the increased levels of uncertainty over progress towards a Brexit deal.
Downing Street’s reneging on its original Withdrawal Agreement has sparked concerns that the UK could push for a no-deal.
GBP/NOK Outlook: Could No-Deal Brexit Fears Continue to Drag on the Pound This Week?
Norwegian Krone (NOK) traders will be looking ahead to Thursday’s release of the latest Norwegian inflation figure for August. If this confirms forecasts and falls from 0.7% to -0.4% in August, then we could see the Norwegian currency suffer.
The GBP/NOK exchange rate will likely remain subdued throughout this week as investors continue to eye UK Brexit developments. As a result, we could see Sterling fall if Downing Street retains its hard-line stance on Brexit negotiations going forward.
Any criticism of the UK Government’s approach to securing a possible trade deal by October would also prove GBP-negative.