GBP/NOK Exchange Rate Steady as Norway’s Growth Outlook Dims on Weak GDP Data
The Pound Norwegian Krone exchange rate held steady today after the latest Norwegian gross domestic product (GDP) figure fell below forecasts by -0.6% in the first quarter. At the time of writing, the pairing is trading around 11.68kr.
The Norwegian Krone (NOK) failed to gain against Sterling, as the Norwegian economy has contracted by -2.5%, its weakest year since the Second World War.
SSB economist Paal Sletten said in a statement:
‘As we have seen before, it is the service industries that depend on physical contact that are most affected when the measures to stop the spread of the virus are implemented.’
April saw Norway lift lockdown restrictions as Covid-19 cases declined, but this has failed to uplift the nation’s economic performance or sentiment.
Norway’s Government has however vowed to offer at least one dose of the vaccine to all adults by the end of July.
As a result, Norwegian Krone investors are becoming steadily more confident about the outlook for Norway’s economy in the months and year ahead.
Pound (GBP) Exchange Rate Steady as UK GDP Rebounds in March
The Pound (GBP) stabilised against NOK today after the UK economy rebounded in March thanks to the Government’s extensive Covid-19 vaccination rollout.
UK GDP lifted by 2.1% in March but dropped by -1.5% in the first quarter of 2021.
Dean Turner, an economist at UBS Global Wealth Management, commented on the report:
‘There is reason for optimism as today’s figures confirm that the UK economy has weathered the first-quarter restrictions much better than initially feared.
‘Moreover, the bounce in activity seen in March, which was the strongest monthly GDP print since August 2020, provides an encouraging backdrop for the second quarter.’
Chancellor Rishi Sunak also celebrated the data, saying that economic growth in March is a ‘promising sign of things to come’.
As a result, the Pound (GBP) has begun to edge higher against some of its peers, but failed to make any notable gains against the Norwegian Krone.
Pound Norwegian Krone Exchange Rate Forecast: Could Lockdown Easing Optimism Drive Up the Pound?
Pound (GBP) investors are looking ahead to tomorrow’s speech from the Bank of England’s (BoE) Deputy Governor Sir Jon Cunliffe and Governor Andrew Bailey.
If either member of the BoE is notably upbeat about the outlook for the UK economy, then the GBP/NOK exchange rate would head higher.
The Pound Norwegian Krone (GBP/NOK) exchange rate could head higher this week, however, because of a lack of notable Norwegian economic data.
As a result, the Norwegian Krone, left relatively rudderless, could fall against Sterling as confidence grows in the UK’s economy ahead of next week’s easing of lockdown restrictions.