GBP/NOK Exchange Rate Rangebound as UK Markets Digest Passing of Controversial Brexit Bill
The Pound to Norwegian Krone (GBP/NOK) held steady this morning, with the pairing currently fluctuating around 11.66kr.
Sterling is range-bound against the Norwegian Krone (NOK) today after last night Parliament saw the controversial Brexit Internal Market Bill pass by a comfortable margin of 77 votes. However, this has sparked concerns over the now more likely possibility of a hard Brexit on December 31st.
Britain’s former ambassador to Washington, Kim Darroch, criticised the new bill, saying:
‘It’s potentially hugely damaging to our international reputation. It puts at risk future international agreements, if people think the Brits are just going to say: we didn’t like this on reflection, and we would like to rewrite this part unilaterally.’
Today will see Pound (GBP) investors weigh up and digest the implications of the new Internal Market Bill. As a result, we could see Sterling quickly slide if the prospect of a no-deal Brexit this year appears increasingly likely.
Meanwhile, Sir John Bell, an advisor to the Government on Life Sciences, said that Downing Street was ‘behind the curve’ on providing Covid-19 tests.
Consequently, we could see the GBP/NOK exchange rate fall should fears over a UK second-wave crisis threatens Britain’s economic recovery.
Norwegian Krone (NOK) Steady as Norwegian Trade Plummets in August
The Norwegian Krone (NOK) suffered today following the release of August’s Norwegian Trade Balance figure, which plummeted from -1.8 billion to -2.9 billion. As a result, NOK investors are becoming worried about Norway’s struggling export-reliant economy.
Statistics Norway was also downbeat in its assessment of Norway’s economy last week, saying:
‘The Norwegian economy is still trying to recover from its most extensive downturn in recent times, but activity is not expected to return to the pre-pandemic level until the end of 2021. We expect a gradual rise in interest rates from 2021.’
Norway’s coronavirus outbreak saw Norway’s mainland GDP fall by a whopping 11% from February to April. While activity levels increased markedly in May, June, and July.
Thomas von Brasch, a researcher at Statistics Norway, commented:
‘The Norwegian economy will continue to catch up as we move forward, but the aftermath of the infection control measures and the downturn in the international economy is likely to mean that the downturn here at home will persist for several years.’
GBP/NOK Forecast: Could Sterling Suffer on Brexit Bill Backlash?
Pound (GBP) investors will be paying close attention to tomorrow’s release of August’s UK inflation data. Any uptick in Britian’s economic progress would prove GBP-positive.
Norwegian Krone (NOK) investors will continue to eye global economic developments. As Norway’s economy is majorly export-reliant, any improvement in the international trade environment would boost the Norwegian currency.
The GBP/NOK exchange rate will remain sensitive to the UK Brexit situation. Consequently Sterling could quickly fall if the EU criticises the controversial UK Brexit Internal Market Bill.