GBP/NOK Exchange Rate Rangebound, Norway’s Economic Outlook Dims
The Pound Norwegian Krone (GBP/NOK) exchange rate held steady today, with the pairing currently trading around 12.071kr after January’s Norwegian trade balance for January eased from 25.6 billion to 21.2 billion.
This follows dovish last week’s comments from the Governor of Norges Bank, Øystein Olsen, who stressed that trade deficits were rising with the economy leaning too heavily on Norway’s oil-fun.
Commenting on the current climate crisis, Olsen added:
‘We’ll have to adapt to the climate risk and take that into consideration regarding the fund’s investments, but using the fund actively as a means of doing something about global challenges is something else. The fund is not a suitable means for doing that.’
Additionally, with rising concern over China’s coronavirus epidemic having a negative impact on the global supply chain, this has held back the NOK/GBP exchange rate today as Norway’s trade-reliant economy could be set to face further obstacles to growth.
GBP/NOK Exchange Rate Steady, Post-Brexit Trade Negotiations Predicted to be Bitter
The Pound (GBP) struggled to gain on the Norwegian Krone (NOK) this morning due to a scarcity of UK economic data until later on this week.
However, following the French Foreign Minister Jean-Yves Le Drain’s warning of potentially bitter post-Brexit trade negotiations between the UK and the EU in the coming months.
An official spokesperson for Downing Street emphasised a degree of compromise between the British government and the European Union, however, commenting:
‘Our approach is clear – we are not asking for anything special, bespoke or unique, but are looking for a deal like those the EU has struck previously with other friendly countries like Canada.’
‘We want a relationship based on friendly cooperation between sovereign equals, one centred on free trade and inspired by our shared history and values.’
Nonetheless, Sterling traders are remaining cautious today as tensions between the EU and the UK continue to flare-up post-Brexit, leaving markets feeling sceptical over whether the UK could secure a compromise trade deal with the EU by the end of the ‘transition period’.
GBP/NOK Outlook: Could Sterling Rise on Low UK Unemployment Reading?
Sterling traders will be looking ahead to tomorrow’s release of the UK ILO unemployment rate figure for December, which is expected to remain at a record low of 3.8%.
As a result, we could see the Pound begin to edge higher against the Norwegian Krone as the UK’s economic outlook brightened towards the end of 2019.
Tomorrow will also see the publication of the UK average earnings report for December, with any signs of improvement proving Pound-positive.
With no Norwegian economic data due out this week, we could see the GBP/NOK exchange rate edge higher as concerns over the global supply chain continue to weigh on confidence in the trade-reliant Norwegian economy.