The Pound Sterling to Norwegian Krone (GBP/NOK) exchange rate is trending within a tight range on Thursday morning.
As we near the UK’s general election, the Pound slumped against the majority of its most traded currency rivals. This is because there are uncertainties regarding the UK’s future in the European Union, especially if the UK Independence Party gains office.
Meanwhile, the Norwegian Krone strengthened against its most traded peers after OPEC forecast slower growth in the US oil supply. However, most experts anticipate oil prices resuming declination which has stymied Krone gains.
The Pound Sterling to Norwegian Krone (GBP/NOK) exchange rate is currently trending in the region of 11.6029.
Pound Sterling (GBP) Exchange Rate Trending Lower on Political Uncertainties
With heightened political risk surrounding the British general election in May, the Pound slumped versus most of its major peers. Opinion polls haven’t indicated a frontrunner, opening up for the potential of a hung parliament with smaller parties such as the UK Independence Party holding the balance of power.
UKIP’s stance on the EU calls for an immediate exit, which is likely to have dramatic consequences for monetary policy. In addition, if the conservatives win they will call for a ‘Brexit’ referendum.
‘The decline in support for the three main parties, and the rise in support for others, means the risk of political instability and the possibility of more radical policy changes is greater than before,’ said Ian Stewart, Deloitte’s chief economist. ‘In the past, CFOs had been more concerned with increased financial and economic uncertainty, but they’re now latching onto the more uncertain domestic political landscape.’
The Pound Sterling to Norwegian Krone (GBP/NOK) exchange rate has fallen to a low today of 11.5902.
Norwegian Krone (NOK) Exchange Rate Strengthens on Oil Prices
Of all the currencies with close ties to crude prices, the Norwegian Krone suffered the largest decline. Having already cut rates in order to counteract the oil slide, the continued downtrend is amplifying concerns that the Norges Bank will have to intervene once again.
‘A general diminishing appetite for foreigners to hold Norwegian assets is my main explanation,’ said Carl Hammer, chief foreign-exchange strategist stated. ‘More and more people are making the conclusion this isn’t a temporary dip in the oil price.’
However, a recent report from OPEC signalled potential for growth in the US oil supply to slow, allowing the Krone to rebound from the significant decline seen at the opening of the European session.
‘OPEC’s monthly report has taken over the focus with prices seemingly rising on their view that US supply will slow,’ Ole Hansen, head of commodity strategy at Saxo Bank A/S, said by e-mail. ‘However, when you see another record production from the US last week despite a 12 percent cut in rig counts it does not give much hope for OPEC that reductions will come from the US.’
Pound Sterling to Norwegian Krone (GBP/NOK) Exchange Rate Forecast to TRend Lower
With uncertainties rife with regards to the UK’s political outlook and the affect these changes may have, the Pound Sterling to Norwegian Krone (GBP/NOK) exchange rate is likely to continue trending lower on Thursday.
The Pound Sterling to Norwegian Krone (GBP/NOK) exchange rate reached a high today of 11.8307.
