The Pound Sterling to Norwegian Krone (GBP/NOK) exchange rate continued to climb and reached a fresh 7-year high on Friday as oil prices extended losses from four-year low and increased concerns over the implications for the Norwegian economy.
The Krone continued to tumble against the Pound and other major peers despite data released earlier in the session showing that manufacturing production in Norway increased unexpectedly last month.
According to Statistics Norway, manufacturing production in the Scandinavian nation increased to a seasonally adjusted level of 1.6%, a sharp rise from the -2.1% recorded in the preceding month. Economists had been forecasting for production to fall by a level of -0.9% in November. On an annual basis manufacturing production rose to 4.6% from 2.1%.
Separate Industrial production data also came in better than forecast. On an annual basis, industrial production increased by 10.7%, up from the previous figure of 7.7% and was better than economist expectations for a fall of -0.16%.
Oil Price War Forecast to Weaken Krone Further
Despite the positive data the Norwegian currency fell as oil prices continued to decline after Saudi Arabia offered its Asian customers record discounts on its oil. The move increased speculation that the Middle Eastern nation is defending its market share from the USA and other major oil producers like Norway.
Oil prices have fallen by 18% since last month and as the Organisation of Petroleum Exporting Countries (OPEC) refrained from tapering production in order to force prices lower and disrupt US oil production.
‘Developments abroad and the fall in oil prices have increased the uncertainty regarding the outlook for the Norwegian economy. Uncertainty regarding developments ahead has increased, particularly in the Euro area. The expected rise in key interest rate abroad has again been deferred. Equity prices and oil prices have fallen,’ said Øystein Olsen, Governor at Norges Bank.
Pound to Norwegian Krone (GBP/NOK) Exchange Rate
The Pound to Norwegian Krone hit a session Low of 11.0271
The Pound to Norwegian Krone hit a session High of 11.1424
The Pound to Norwegian Krone is trading in the region of 11.1255
