The Pound Sterling to Norwegian Krone (GBP/NOK) exchange rate dived by around -0.75% on Monday.
The recent rise in oil prices caused some optimistic traders to speculate that Norges Bank will delay a rate cut which, in turn, caused the Norwegian Krone to strengthen versus the majority of its most traded currency rivals. Considering a rate cut of 25 basis points in March was expected by most, it is unsurprising that the Krone recovered some of those losses.
After British house price data produced a mixed set of results, the Pound softened versus most of its major peers; albeit minimally. This is because of continued positive sentiment towards the Bank of England (BoE) after Governor Mark Carney hinted that low inflation will not delay a rate hike.
The Pound Sterling to Norwegian Krone (GBP/NOK) exchange rate is currently trending in the region of 11.6081.
Pound Sterling (GBP) Exchange Rate Edges Lower on House Prices
As explained above, the prospect that the BoE will be one of the trend setters for a period of rate hikes has seen continued support for the British asset. However, slightly disappointing domestic data caused Sterling to soften versus many of its most traded currency counterparts. Rightmove House prices declined on a yearly basis from 8.2% to 6.6%, but did manage a slight appreciation on a monthly basis from 1.4% to 2.1%.
Rightmove director Miles Shipside said: ‘Decades of inadequate provision of homes to satisfy growth in demand are having an increasing effect, with a tight-stock market resulting in a shortage of quality property for sale to trade up to.’
The Pound Sterling to Norwegian Krone (GBP/NOK) exchange rate dropped to a low of 11.5832.
Norwegian Krone (NOK) Exchange Rate Rallies on Potential Rate Cut Delay
Having priced in a rate cut in March’s Norges Bank policy decision amid tanking oil prices, the recent resurgence in crude caused many to speculate that the Norwegian central bank will delay the cut. This allowed the Krone to strengthen versus the majority of its most traded rivals as a result of recovering some of the priced-in declination.
A forex analyst said; ‘While the NOK weakened on the back of a proactive Riksbank last Thursday, EUR/NOK has since gradually edged lower on the back of ‘no-panic’ comments from Norges Bank governor Olsen and a general rebound in oil prices Friday amid a continued drop in total US rig counts and leading oil companies announcing capital expenditure cuts.’
A report did show that Norway’s trade surplus narrowed from 30.1 billion to 27.1 billion, but the data had minimal impact with traders looking forward to the Norges Bank rate decision.
Pound Sterling to Norwegian Krone (GBP/NOK) Exchange Rate Forecast to Hold Losses
Given the distinct lack of domestic data to promote significant changes, the Pound Sterling to Norwegian Krone (GBP/NOK) exchange rate is likely to hold losses for the remainder of Monday. Tuesday is likely to see heightened volatility with British inflation data due for publication. Any large swings in oil prices will also have an effect on the pairing.
The Pound Sterling to Norwegian Krone (GBP/NOK) exchange rate advanced to a high of 11.6981.
