GBP NOK Exchange Rate Strengthens as Oil Prices Continue to Plummet

Pound Norwegian Krone (GBP NOK) Rises as Crude Prices Tumble

The Pound Norwegian Krone (GBP NOK) exchange rate struck higher today as crude prices continued to fall during early trading.

With petroleum products accounting for over 60% of Norway’s exports its economy is extremely sensitive to movements in the oil market.

Crude prices fell around 1.4% on Wednesday morning as the Organization of the Petroleum Exporting Countries (OPEC) reported that global stocks had continued to rise, despite efforts by the cartel and other supporters such a Russia to limit output, saying;

‘Despite the supply adjustment, stocks have continued to rise, not just in the US, but also in Europe. Nevertheless, prices have undoubtedly been provided a floor by the production accords.’

However an unexpected contraction in US crude inventories this afternoon may prompt prices to strike higher later today as the US Energy Information Administration (EIA) reported that stocks contracted by 237,000 in the week ending March 10th, a significant drop from the 8.2m barrel surplus the week before.

Pound Bolstered by Labour Report

The uptick in the Pound today was also prompted by some impressive labour figures released by the Office for National Statistics (ONS) as it reported that the UK’s jobless numbers fell to their lowest levels since 1975.
Data shows that the Unemployment rate fell from 4.8% to 4.7% in January, suggesting that the vote to leave the EU was not having a negative impact on the UK’s labour market, with the jump being tied to the dramatic rise of firms like Uber that hire large numbers of self-employed workers.

Professor Geraint Johnes, Director of Research at Lancaster University’s Work Foundation, said;

‘The latest labour market statistics show a large rise in employment and a fall in unemployment. The big gain has come from full-time self-employment, perpetuating the apparent ascendancy of the gig economy’
However Sterling’s gains were slightly muted by the accompanying wage data as the ONS reported that Wage Growth continued to slow at the start of 2017, sliding from 2.6% to 2.2% after falling from 2.8% in December and placing further pressure on consumer this year.

GBP NOK Exchange Rate Forecast: BoE Rate Decision Ahead

The Bank of England (BoE) will convene for its latest policy meeting tomorrow, likely causing the Pound to cede some of its recent gains as economists predict that Governor Mark Carney will announce that interest rates will be held at a record low of 0.25%, despite the accelerated pace of inflation.

However the Norwegian Krone may paint a similar story tomorrow as Norway’s own central bank, the Norges Bank is also expected to keep interest rates at a record low during its March meeting.

At the time of writing the GBP NOK exchange rate was trending around 10.50 and the NOK GBP exchange rate was trending around 0.09.