GBP/NOK Exchange Rate Rangebound as Brexit Remains in Focus
The Pound to Norwegian Krone (GBP/NOK) exchange rate is currently struck trading just shy of a one-week low as the UK and EU prepare to hold an emergency meeting on Brexit.
At the time of writing the GBP/NOK exchange rate is trading at around KR11.7314, virtually unchanged from this morning’s opening rate.
Pound (GBP) Sidelined by Brexit Woes
The Pound (GBP) is currently rangebound against the Norwegian Krone (NOK) and majority of its other peers this morning as Brexit continues to dominate headlines.
The UK and EU will hold emergency talks today, with Cabinet Office Minister Michael Gove meeting with EU official Maros Sefcovic in response to the UK’s proposed internal market bill, which would override parts of the EU withdrawal agreement.
The U.K. and the EU will hold emergency talks to discuss Boris Johnson’s plan to break international law and re-write the Brexit divorce deal
Live updates: https://t.co/gwgtA2azol pic.twitter.com/BvnIu0MnQg
— Bloomberg Brexit (@Brexit) September 10, 2020
The bill is accused of breaking international law, and has understandably angered the EU which has insisted the withdrawal agreement is not up for renegotiation.
Meanwhile, the latest round of trade talks remain ongoing, but GBP investors aren’t holding out much hope that any meaningful progress will be made this week, particularly in light of recent developments.
Norwegian Krone (NOK) Consolidates Gains after Oil Rebound
At the same time, the Norwegian Krone (NOK) is holding its ground this morning, having rebounded from a one-month low against the Pound (GBP) on Wednesday in response to a rally in oil prices.
Brent crude prices rallied roughly 3% yesterday to close just shy of $41 a barrel, helping to boost the commodity-linked Krone.
This uptick in oil prices was attributed to Wednesday’s rebound in the stock market as well as moves by Saudi Arabia state producer, Aramco to cut prices for light crude in October.
However the recovery looks fragile, with crude prices already beginning to dip this morning and NOK exchange rates slide as the US reported a surprise build up in oil stockpiles last week.
Analyst warns that Brent crude is unlikely to sustain prices above $40 a barrel going forward as global demand looks set to be hit by a resurgence in coronavirus cases and the potential for this to stall the global economic recovery.
GBP/NOK Exchange Rate Forecast: Robust UK GDP Figures to Offer some Respite to Sterling?
Looking ahead, the Pound to Norwegian Krone (GBP/NOK) exchange rate may recoup some ground at the end of this week’s session, with the publication of the UK’s latest monthly GDP release.
Tomorrow’s figures are expected to report that the UK economy expanded a solid 6.7% in July as more of the country’s lockdown restrictions were lifted.
This will bolster hopes for a healthy rebound in growth in the third quarter and may help Sterling to shake off some of the Brexit blues.
Meanwhile, in the absence of any notable economic data, the Norwegian Krone is likely to continue to track the direction of oil prices, likely giving some ground if the crude rally proves to be little more than a dead-cat bounce.