The Norwegian Krone (NOK) to Pound Sterling (GBP) exchange rate declined to its lowest level since early August on Wednesday as positive jobs data supported Sterling and domestic Nordic data weighed upon the Scandinavian currency.
As Norway is a major exporter of oil, the nation’s economy has taken a hit in recent weeks from tumbling commodity prices. The Krone came under pressure early in the session on news that crude oil prices continued their biggest one-day decline in four years as OPEC said that it would refrain from ending the glut of supply even as demand growth fell to its lowest level since 2009.
Prices tumbled by 4.3% on Tuesday alone, the largest one-day decline seen since September 2011. Global oil demand forecasts were also slashed by 250,000 barrels per day to 650,000.
Surge in Imports Narrows Norway Trade Balance
The Krone also came weakened as Norways Trade Balance declined to 21.6 billion in September from the previous figure of 22.4 billion.
The fall in the trade surplus was down to a surge in imports which soared by 12.2% to NOK 50.1 billion, the second highest level seen. Only March 2011’s imports figure has been higher. According to Statistics Norway, the rise in imports was a result of increased demand for machinery needed for heavy industrial projects.
Exports also rose by 7.7% from the preceding year to generate NOK 71.7 billion. Despite the fall in oil prices, exports of the commodity increased by 18.2%. The price per barrel of crude oil in September came to NOK 618 per barrel, down by NOK 53 compared with the corresponding month last year. A total of 39 million barrels were exported in September, which is over 8.5 million barrels more than in September last year. Crude oil exports in September 2013 were low due to maintenance.
UK Data Supports Pound
The Pound managed to advance against most of its major peers after the Office for National Statistics (ONS) released data, which showed that UK unemployment fell more than forecast in August. The jobless rate declined to 6%, its lowest level in six years.
Wage growth also edged higher, increasing optimism that the Bank of England may still vote in favour of raising interest rates sooner rather than later.
Average weekly earnings including bonuses rose by 0.7% in the three months leading to August. Excluding bonuses pay increased by 0.9%, beating forecasts for a figure of 0.8%.
The Pound Sterling to Norwegian Krone Exchange Rate was Trading in the Region of : 10.532
The Euro to Norwegian Krone Exchange Rate was Trading in the Region of : 8.368
The US Dollar to Norwegian Krone Exchange Rate was Trading in the Region of : 6.618
