GBP/NOK: Sterling Gives Back Gains After Polls Show Corbyn Narrows Gap with Johnson

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After closing the previous week with a significant gain of 1.03%, the British pound lost some ground against the Norwegian krone during the Asian session with the opening of the new trading week to reach an intraday low of 11.8754.

Headline risks remain a major driver of sterling ahead of the December 12 general election. After a YouGov poll showed that the Conservative Party is set to win a majority of 68 seats in the Parliament last week, boosting the value of sterling, a new BMG Research poll showed that support for Boris Johnson slipped 2% to 39%, while Corbyn’s Labour Party gained 5% to stand at 33% on Sunday.

This lead of 6 percentage points is more than half the margin in the same survey conducted only ten days earlier and the smallest gap among five polls published on Sunday.

Nevertheless, a statement made by the Confederation of British Industry said that Johnson’s “get Brexit done” attitude could help unlock investment in the United Kingdom and improve growth in case of an “ambitious deal” on trade.

The latest CoT report published by the CFTC showed investors were adding to their short positions and cutting their long positions in the pound through Tuesday. Net short positions have increased by almost £93 million, taking the net total bearish positioning to slightly below £2 billion.

Markets are now awaiting the UK and Norwegian manufacturing PMI numbers, with both reports scheduled for later today.

From a technical standpoint, the krone picked up some support at the upper triangle resistance as previously expected. A break above the October 29 high of 11.97 would send the pair to the highest levels since the 2016 Brexit vote, which would take a significant bullish shift in the pound.

While any upside potential in the pair looks limited at the moment, the November 20 high of 11.88 could provide some support in the short-term.


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