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Surprising Positive in UK CPI Data Sends Pound Soaring Against Norwegian Krone
Published: 18 Aug at 1 PM Tags: Pound Sterling, Currency Exchange, UK, Exchange Rates, Inflation,
Hawkish Pound Dominates the Field amid UK Interest Rate Hike Speculation Frenzy
The Pound Sterling has demonstrated extremely hawkish behaviour today against all major rivals, but most of all against the Krone. Sterling peaked at 12.9863 today, although the gains seen by the Pound are likely to continue as the UK currency continues to enjoy its best exchange rate trend against the Krone for a month.
The major uptrend seen by the Pound today has come from a perfect storm of news and inaccurate predictions since Saturday. In an article published online, Bank of England (BoE) Monetary Policy Committee (MPC) member Kristin Forbes stated that the BoE would be remiss not to raise the UK interest rate before UK inflation reached the Bank’s target of 2%. In essence, the article made the argument that any increase in the UK inflation rate would help to increase the odds of the UK interest rate going up. The Pound’s performance improved yesterday as a result of these comparatively hawkish comments, but this morning Sterling fell into a lull before the UK annual CPI figure for July was announced.
This drop in activity came from the pessimistic predictions for the CPI results; forecasts were for either a stagnation of the annual rate or a return to deflation, the latter outcome may have been disastrous for the Pound’s value. As it happened, both of these expectations proved to be false and the UK inflation rate instead rose by 0.1%. While this is an admittedly small figure, the rise proved to be the impetus for a Pound Sterling rally, and the Pound climbed rapidly against all of its competitors following the announcement.
Current Pound to Krone Exchange Rate Trend Expected to Stay Strong as Crude Oil Prices Remain Down
The Pound is expected to hold its position of dominance against the Krone until at least Thursday, when the Norwegian Q2 GDP results come in. Both the yearly and quarterly figures have been forecast for a rise, but this may not be enough to penetrate the aura of optimism that currently surrounds the Pound Sterling. The UK Retail Sales figures are also out on Thursday and as the outlook for these figures is positive, it is expected that the Pound will extend the gains seen today.
The Pound Sterling has demonstrated extremely hawkish behaviour today against all major rivals, but most of all against the Krone. Sterling peaked at 12.9863 today, although the gains seen by the Pound are likely to continue as the UK currency continues to enjoy its best exchange rate trend against the Krone for a month.
The major uptrend seen by the Pound today has come from a perfect storm of news and inaccurate predictions since Saturday. In an article published online, Bank of England (BoE) Monetary Policy Committee (MPC) member Kristin Forbes stated that the BoE would be remiss not to raise the UK interest rate before UK inflation reached the Bank’s target of 2%. In essence, the article made the argument that any increase in the UK inflation rate would help to increase the odds of the UK interest rate going up. The Pound’s performance improved yesterday as a result of these comparatively hawkish comments, but this morning Sterling fell into a lull before the UK annual CPI figure for July was announced.
This drop in activity came from the pessimistic predictions for the CPI results; forecasts were for either a stagnation of the annual rate or a return to deflation, the latter outcome may have been disastrous for the Pound’s value. As it happened, both of these expectations proved to be false and the UK inflation rate instead rose by 0.1%. While this is an admittedly small figure, the rise proved to be the impetus for a Pound Sterling rally, and the Pound climbed rapidly against all of its competitors following the announcement.
Current Pound to Krone Exchange Rate Trend Expected to Stay Strong as Crude Oil Prices Remain Down
The Pound is expected to hold its position of dominance against the Krone until at least Thursday, when the Norwegian Q2 GDP results come in. Both the yearly and quarterly figures have been forecast for a rise, but this may not be enough to penetrate the aura of optimism that currently surrounds the Pound Sterling. The UK Retail Sales figures are also out on Thursday and as the outlook for these figures is positive, it is expected that the Pound will extend the gains seen today.
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Source: moneytransfer.co.uk