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GBP/NOK Exchange Rate Outlook Kept Under Pressure as Norway Data Continues to Impress Markets

Norwegian Krone Currency Forecast

GBP/NOK Exchange Rate Still Struggling to Recover despite Sterling Rebound 

The Norwegian Krone (NOK) remains a resilient and appealing currency, and the Pound Sterling to Norwegian Krone (GBP/NOK) exchange rate remains weak today. Continued strength in Norway’s data is supporting NOK. 

After a fairly volatile week last week, GBP/NOK’s movement has been a bit steadier since Monday. 

Last week saw GBP/NOK attempt advances at multiple points, but ultimately slipped from the level of 11.74 to 11.71 throughout the week. 

This week’s movement has been more bearish so far, as the Pound’s (GBP) advance attempts become softer. At the time of writing, GBP/NOK is trending near lows of 11.64 – the worst level for the pair in over a fortnight since late-January. 

Pound (GBP) Exchange Rates Lack Drive as Rally Slows 

In recent weeks, the Pound (GBP) has surged on speculation over Britain’s coronavirus vaccination rollout. 

Britain’s vaccine programmes are further ahead than other major economies, boosting hopes that Britain’s economy will recover from the coronavirus pandemic sooner than others. 

Sterling’s gains are slowing this week though, as strength is repriced into the Pound’s outlook. Fresh signs that UK lockdowns could impact the longer term economic outlook didn’t have much impact on Sterling. 

Investors are hesitant to move much on Sterling today as they await upcoming comments from Bank of England (BoE) Governor Andrew Bailey.  

Norwegian Krone (NOK) Exchange Rates Kept Appealing by Data and Commodities 

Norwegian ecostats continue to beat market expectations this week, which are helping to buoy strength in the Norwegian Krone. 

Yesterday’s Norwegian consumer confidence results for Q1 2021 beat expectations, printing at –5.1 rather than the expected –8.2. 

Then, today’s Norway inflation rate figures also came in well above forecasts. January’s monthly inflation rate was 1.1% rather than the forecast 0.9%, and yearly inflation surged from 1.4% to 2.5%. 

The Norwegian Krone is also often correlated to prices of oil, as oil trade is influential to Norway’s economic activity. As a result, strong oil prices continue to support NOK strength this week as well. 

Pound to Norwegian Krone (GBP/NOK) Exchange Rate Awaits Friday’s Key Growth Stats 

The Pound to Norwegian Krone exchange rate’s movement may remain limited until the end of the week, when most of the week’s key UK and Norway data will be published. 

Until them, developments in the coronavirus pandemic and vaccine rollout, as well as shifts in market trade sentiment and oil prices, will also influence GBP/NOK. 

Pound movement could also be influenced by comments from Bank of England (BoE) Governor Andrew Bailey expected this evening. 

If Bailey’s comments are more dovish than expected, the Pound outlook could take a hit and GBP/NOK could trend even lower. On the other hand, signs of a relatively optimistic BoE could keep the GBP/NOK outlook resilient. 

Friday’s session will be the focus for Norwegian Krone investors for now. Norway growth rate results from Q4 will be published and will give investors a better idea of how well Norway’s economy is weathering the coronavirus pandemic. 

UK trade, production, business investment and growth rate results from Q4 and December will also be published on Friday. These figures could have a big impact on Pound trade and the Pound to Norwegian Krone (GBP/NOK) exchange rate if they surprise markets.