Pound to Norwegian Krone Exchange Rate Edges Higher despite Strong Norway Data
Despite some strong Norway data published today, the Pound Sterling to Norwegian Krone (GBP/NOK) exchange rate has been climbing. It comes as the Pound (GBP) is once again lifted by market coronavirus hopes.
While there have been dips on market risk-sentiment and oil prices, GBP/NOK has generally been trending higher over the past week. Last week saw GBP/NOK rise from 11.67 to 11.71.
At the time of writing, GBP/NOK trends even higher in the region of 11.74. This is close to the pair’s best levels in almost half a month.
Investors have been hesitant to buy the Norwegian Krone (NOK) despite strong data. Weakness in oil price markets, as well as worsening US-China trade tensions, are hurting the Krone’s appeal due to its correlation to trade sentiment.
Pound (GBP) Exchange Rates Rebound on Coronavirus Hopes
Over the past week, the Pound has seen various rebound attempts as investors look to buy the British currency back from its cheapest levels.
This has been supported by various factors. Last week’s UK data beat forecasts, and hopes for progress in developing a coronavirus vaccine are boosting Sterling today.
As one vaccine seeing progress is being developed in Britain, the Pound does see stronger demand at times of vaccine optimism.
On top of this, today’s UK distributive sales report from the Confederation of British Industry (CBI) came in well above forecasts, jumping to growth of 4.
According to CBI Chief Economist Rain Newton-Smith though, the strong figure shouldn’t distract from the huge uncertainties persisting in retail;
‘It’s great to see retail sales stabilise this month, but this doesn’t tell the whole story.
This crisis has created winners and losers within the retail sector and for some businesses the picture remains bleak.’
Norwegian Krone (NOK) Exchange Rates Struggle to Advance despite Strong Data
The Norwegian Krone continues to see limited appeal this week, following its losses last week.
As a currency sometimes correlated to market trade sentiment, it has been less appealing amid concerns about a ‘second wave’ of coronavirus infections, as well as worsening trade tensions globally.
US-China trade tensions have flared up again. A combination of this and coronavirus jitters have also led to plunging oil prices. As oil is a big export for Norway, this has also been weighing on the Norwegian Krone’s appeal.
As a result, the Krone has been unable to benefit much from today’s Norwegian ecostats, despite them generally performing better than expected.
Norway’s household consumption figures from June rose to 5.3%. Meanwhile, retail sales jumped to 13.7% year-on-year, despite being forecast to only come in around 4.9%.
Pound to Norwegian Krone (GBP/NOK) Exchange Rate Focuses on Coronavirus amid Quiet Calendar
Not much notable UK or Norwegian data will be published for the remainder of the week. UK mortgage data due tomorrow and car production figures on Thursday are unlikely to have much impact on the Pound outlook.
Instead, the Pound to Norwegian Krone exchange rate is more likely to be driven by global coronavirus developments and shifts in risk-sentiment over the coming sessions.
The Pound may be more likely to continue its rebound attempts if there are any optimistic developments from UK companies producing coronavirus vaccines.
As for the Norwegian Krone, a more sustained advance in oil prices or softer US-China trade war fears could help the currency.
As the Pound outlook remains gloomy on coronavirus and Brexit uncertainties, the Pound to Norwegian Krone (GBP/NOK) exchange rate’s outlook is unlikely to improve too much however.