UK Retail Sales Smash Expectations in April – Pound Norwegian Krone (GBP/NOK) Exchange Rate Rallies
The Pound Norwegian Krone (GBP/NOK) exchange rate crawled higher on Thursday, bolstered by a surprising recovery in UK retail sales over the April period.
The Office for National Statistics (ONS) revealed that shoppers hit the highstreets in droves last month, with the year-on-year figure rising by 1.5% – up from the previous score of 1.3% and the dreary forecast of 0.1%.
The month-on-month reading also proved upbeat with a 1.3% rise – smashing the previous -0.5% contraction and the 0.4% forecast.
This rise was largely due to rebounding petrol prices and overall helped brighten the outlook for the British economy in Q2.
It should also push the Bank of England (BoE) closer towards hawkish monetary policy measures in the coming months – but given the disappointing performance of UK consumer price inflation, many investors remain sceptical.
Norwegian Krone (GBP/NOK) Exchange Rates Fluctuate on Higher Oil Prices
Being an oil producing nation, the ongoing rise in oil prices has been largely beneficial for the Norwegian Krone (NOK) though, somewhat ironically, the Norwegian economy is dependent on a weaker krone in order to facilitate export-led growth.
Nonetheless, as crude oil prices continue to approach $80 a barrel the outlook for the Norwegian Krone has improved, with the general trend this week favouring the Krone, rather than the Pound.
This has reversed today, however, with investors choosing to favour Sterling purely on the basis of the latest upbeat retail sales report.
Looking ahead, tomorrow will feature Norway’s unemployment rate report for March, which investors expect to remain at the extremely robust level of 3.9%.
If this occurs then we could see the Krone make a small recovery – though this will largely be dependent on the performance of tomorrow’s UK GDP results.
Pound Norwegian Krone (GBP/NOK) Exchange Rate Forecast: UK GDP Looms
The Pound Norwegian Krone (GBP/NOK) exchange rate could see increased volatility tomorrow as investors respond to the UK’s 2nd Q1 GDP estimate.
This estimate will also be significant in that it will help the BoE decide monetary policy moving forward.
Analysts currently expect the headline reading to ease slightly, and if this proves accurate then we could see Sterling resume its slide.