GBP/NOK Exchange Rate Rangebound, Could Sterling Sink on Brexit Jitters?
The Pound to Norwegian Krone (GBP/NOK) exchange rate held at around 12.160kr this morning, with Sterling continuing to benefit from rising fears over the global spread of the coronavirus (Covid-19) as the UK remains relatively unscathed by the epidemic.
Paul Meggysei, an analyst at JP Morgan, said that Sterling had continued to ‘perform idiosyncratically rather than as a traditional reserve currency’ due to the UK having avoided the coronavirus panic.
Sterling has also benefited from a weakening US Dollar following yesterday’s rising odds of a rate cut from the US Federal Reserve as a slowing global economy threatens to weaken America’s presently robust economic performance.
The Pound’s (GBP) gains are likely to be short-lived, however, as Brexit jitters are set to return after Downing Street rejected the EU’s ‘onerous’ negotiation mandate.
Prime Minister Boris Johnson’s official spokesperson commented:
‘[The UK has] been very clear on our commitment to discuss open and fair competition as part of negotiations, but we will not accept any demands for the UK to follow EU rules, just as we would not expect the EU to accept UK laws.’
NOK/GBP Exchange Rate Steady In Spite of Strong Norwegian Labour Data
The Norwegian Krone (NOK) failed to capitalise on today’s strong Norwegian Labour Force Survey for December, which rose by 3.9%. Due to sinking oil prices over fears of a global spread of the coronavirus, the oil-correlated NOK has continued to suffer.
Ned David Research said in its statement:
‘The oil market is looking down the barrel at no demand growth for the calendar year, and outright demand contraction is now on the table.’
With the Norwegian Krone being so closely tied to the Eurozone’s economic strength, NOK investors have reasons for concern following Germany’s flagging economic performance and dimming outlook for 2020.
Also, with Norway’s economy being particularly reliant on a healthy global supply chain, concerns of a slowing global economy are leaving many investors feeling wary of the Norwegian Krone today.
GBP/NOK Outlook: Could the Norwegian Krone Rise on Strong Retail Sales?
Norwegian Krone (NOK) investors will be looking ahead to tomorrow’s publication of January’s Norwegian Retail Sales report. With the figure expected to rise from -2% to 1.1%, however, we could see the NOK/GBP exchange rate being to edge higher.
Sterling traders, meanwhile, will be paying close attention to Sir Jon Cunliffe, the Deputy Governor for Financial Stability for the Bank of England, tomorrow. If he is notably downbeat in his assessment of the British economy going forward this would prove Pound-negative.
The GBP/NOK exchange rate will continue to be driven by Brexit developments, however, with any signs of the UK and the EU becoming more heated in trade discussions ahead of next month weakening the Pound.
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TAGS: Norwegian Krone Forecasts Pound Norwegian Krone Forecasts