The Pound (GBP) softened against the Norwegian Krone (NOK) on Tuesday after data showed that UK industrial production was unchanged in August and as data out of Norway offered the Scandinavian currency support.
According to the Oslo based Statistics Norway, Norway’s industrial production rebounded in August. The industrial production index rallied by 2.3% on a year on year basis, countering most of the -2.8% decline recorded in July.
Another report showed that Manufacturing output increased by 5.2% in August, adding to the 2.9% rise seen in the preceding month.
Among other sub sectors, production of electricity, gas and stem fell 2.6%, while in the mining and quarrying sector, output rose 7.9%.
A separate report showed that turnover generated by Norway’s manufacturing sector increased by 4.5% on a year on year basis and jumped by 6.1% on a month on month basis.
Sterling softened against the Norwegian Krone after domestic data out of the UK showed that industrial production was unchanged in August from July thanks to the closure of several North Sea facilities. As a result oil and gas extractions contribution to the overall figure dipped by 1.7%.
A separate report released by the London based Office for National Statistics showed that manufacturing production rose by 0.1% in August, matching economist forecasts. Industrial production disappointed as many economists had been forecasting for a rise of 0.2%.
‘Weak Eurozone activity is clearly having a limiting impact on foreign demand for UK manufacturing goods. The recent strength of the pound has not helped UK manufacturing exports. In addition, it is possible that current heightened geopolitical tensions and the weakness in the Eurozone is increasing business caution and causing some orders to be delayed or even cancelled,’ said Howard Archer from IHS Global Insight.
Pound Sterling to Norwegian Krone (GBP/NOK) Exchange Rate Forecast
With the Bank of England, beginning its two-day long policy meeting on Tuesday investors will shift their focus to the outcome due on Thursday.
With recent domestic data releases coming in softer than forecast, the likelihood of policy makers voting in favour of interest rate hikes are unlikely. Rates will likely stay at 0.5% and will leave its monthly quantitative easing programme at £375 billion.
‘The slowdown in growth levels should not mask the reality that the manufacturing sector continues to grow although at a far more restrained level than we witnessed in the first half of the year,’ said Mike Rigby, head of manufacturing at Barclays.
The next major data release due out of Norway comes on Friday with the publication of the latest Inflation and PPI figures.
Norwegian Krone (NOK) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,Norwegian Krone,10.4104 ,
Euro,, Norwegian Krone,8.1715 ,
US Dollar,, Norwegian Krone,6.4862 ,
[/table]
