Pound to Norwegian Krone Exchange Rate Steadies as Krone Resilient
Update 16:24 GMT 10/11/2020:
The Pound to Norwegian Krone (GBP/NOK) exchange rate remains pressured this afternoon. Investors continue to find the Norwegian Krone (NOK) more appealing than the Pound (GBP).
GBP/NOK is trending near the interbank level of 11.93. This puts it closer to yesterday’s low than this week’s opening levels.
The Norwegian Krone is holding its ground amid strength in oil prices, as oil is a big export for Norway.
While Sterling jumped against other major currencies today, it was unable to recover against a resilient Krone.
(Originally published 11:50 10/11/2020)
Pound to Norwegian Krone Exchange Rate Lower as Markets Buy Commodities
The Pound Sterling to Norwegian Krone (GBP/NOK) exchange rate continues to trend lower this week, in reaction to the latest shifts in market sentiment. Rising coronavirus hopes and higher oil prices are boosting the oil-correlated Norwegian Krone (NOK) higher.
Last week saw considerable losses in GBP/NOK, as the Krone benefitted from improving market sentiment. GBP/NOK tumbled from the interbank level of 12.35 to 12.04 last week.
This week’s movement has thus far seen continued bearishness, as market sentiment continues to buoy. Yesterday, GBP/NOK touched on a low of 11.81 – the worst level for the pair in a month and a half.
GBP/NOK is trending a little higher at the time of writing, in the interbank region of 11.92. The pair remains under pressure, but the Pound (GBP) could recover if its outlook improves.
Pound (GBP) Exchange Rates Lack Drive amid Gloomy UK Job Market Report
The Pound (GBP) has been steadying slightly in response to market optimism this week. News that Joe Biden had won the US 2020 Presidential Election, as well as hopes for progress in coronavirus vaccine development, have both helped.
However, compared to currencies more correlated to risk and commodity sentiment, like the Norwegian Krone (NOK), the Pound’s benefit has been limited.
Sterling is also being weighed by uncertainty around Britain’s coronavirus and Brexit outlooks.
Today’s UK job market report showed that Britain’s key unemployment rate has significantly worsened, as expected, to 4.8%.
It is due to damage caused to businesses by the coronavirus pandemic and the government’s previous furlough scheme ending.
The official rate of unemployment rose to 4.8% (July – September) on the back of a surge in redundancies. Bank of England thinks it will peak at 7.75% next year. OBR forecast of 11.9% is much gloomier. This crisis is moving fast and official data is lagging developments. pic.twitter.com/iYdkxqWrpT
— Joel Hills (@ITVJoel) November 10, 2020
Norwegian Krone (NOK) Exchange Rates Supported by Rebounding Oil Prices
The Norwegian Krone (NOK) is a currency often correlated to prices of oil. This is because oil trade is significant to Norway’s economy.
Oil prices have been surging in reaction to this week’s coronavirus vaccine news. Yesterday. Pfizer said that its coronavirus vaccine was trialling effectively and safely.
According to Analysts at JP Morgan, any light at the end of the coronavirus tunnel would boost oil demand:
‘A viable vaccine is unequivocally game-changing for oil – a market where half of demand comes from moving people and things around,’
These optimistic developments are especially helpful for economies hit hard by the pandemic. Norway’s economy has been struggling amid the pandemic in recent months.
Today’s Norwegian inflation rate data met forecasts. It had little impact on the Norwegian Krone outlook.
Pound to Norwegian Krone (GBP/NOK) Exchange Rate Could Recover on Brexit Hopes
The Pound to Norwegian Krone (GBP/NOK) exchange rate remains near its worst levels in over a month. However, the pair’s movement could shift in the coming weeks depending on how expected UK-EU Brexit negotiations unfold.
Analysts predict the UK and EU will agree to a Brexit deal sometime this month. As a result, the Brexit process is returning to focus.
If there are any optimistic developments in a Brexit deal, the Pound (GBP) is likely to see a surge in demand. This could even help the Pound to recover much of its recent losses.
On the other hand though, if a no-deal Brexit starts to look more likely instead, the Pound could be in for deeper losses in the coming weeks.
Meanwhile, if oil prices continue to rise, the oil-correlated Norwegian Krone (NOK) could continue to benefit.
Analysts advice caution though. If market sentiment takes another shock and a turn for the worse, the Pound to Norwegian Krone (GBP/NOK) may advance here too as the Norwegian Krone gives up recent gains.