GBP/NOK Exchange Rate Flat as Norwegian Retail Sales Sink in June
The Pound Norwegian Krone (GBP/NOK) exchange rate edged higher today, leaving the pairing trading around 10.640kr.
The Norwegian Krone (NOK) failed to benefit from this morning’s publication of the Norwegian retail sales figures for June, which eased by -0.4% following May’s slump of -1.3%.
As the Norwegian currency is so closely tied to the Eurozone’s economic health, fears of a slowing down of European growth figures this week are causing some concern for NOK traders as this may signal further rate cut potential for Norway’s central banks.
UK’s Brexit is also leaving NOK traders feeling jittery, as potential negotiations between the UK and the EU are showing increasing strains.
The Pound, meanwhile, fell against many of its other competitors today as Prime Minister Boris Johnson has effectively refused to engage with EU leaders unless they remove the Irish backstop from the current withdrawal agreement – a condition repeatedly rejected by the EU.
Mr Johnson said:
‘They all know where we are: we can’t accept the backstop, it was thrown out three times, the withdrawal agreement as it stands is dead and everybody gets that. But there is ample scope to do a new deal and a better deal.’
GBP/NOK Exchange Rate Rangebound as No-Deal Brexit Fears Dampen Market Confidence in Sterling
The Pound gained against the Norwegian Krone despite dwindling UK market confidence as fears of a disorderly Brexit are now seen as more likely on 31 October – the date the UK is due to leave the European Union.
Neil Wilson, a Chief Market Analyst at Markets.com, said:
‘The reasons behind the slide are well trodden but worth noting again: increased risk of a no-deal Brexit as the new government regime pivots squarely towards making no-deal a reality.’
No-deal fears have since increased following yesterday’s comments from Michael Gove, the former Environment Secretary, who said that the UK Government is now working under the ‘assumption’ of a chaotic exit.
Downing Street’s readout of a call between Boris Johnson and Leo Varadkar, the Irish Taoiseach, failed to convince Sterling traders:
‘The prime minister made clear that the government will approach any negotiations which take place with determination and energy… and that his clear preference is to leave the EU with a deal, but it must be one that abolishes the backstop.’
GBP/NOK Outlook: Sterling Could Sink on Heightened Brexit Woes
Pound traders will be looking ahead to tomorrow’s GfK Consumer Confidence figure for July, which is expected to hold at -13.
Norwegian Krone investors, meanwhile, will be paying close attention to European and global economic developments over this week.
The GBP/NOK exchange rate is likely to remain volatile this week with Brexit uncertainty rising as the divide between the UK and EU increases over the Irish backstop issue.