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The pound was consolidating gains against the Norwegian krone during the Asian session after reaching its best level since the 2016 Brexit vote in yesterday’s trade.
With less than a week until the UK general election, markets are hoping for a commanding win of the ruling Tories and a Conservative majority in the Parliament, with most polls pointing in that direction.
However, not all are certain that the UK will leave the European Union with a deal in 2020. According to a Bank of England survey, around 20% of UK businesses see Brexit occurring in 2021. 12% of the firms believe the UK will remain in the EU.
The labour market has also not been immune to the political uncertainty around the election. A survey conducted by KPMG showed that demand for workers rose at the slowest pace since the 2008 crisis. Businesses were delaying hiring plans and workers hesitated to change jobs amid the Brexit confusion.
There are no market reports of note from the UK or Norway today. Thought, slightly lower oil prices could put some downward pressure on the krone. Any election headlines that show a better outlook for the Tories to form a Parliament majority could additionally support the pound in the coming days.
Sterling reached a multi-year high during yesterday’s trading session. It started to consolidate gains in the early Friday session to trade slightly lower against the krone. As of 7:00 a.m. London time, one pound bought 12.01 Norwegian krones.
The pair was trading near the upper channel resistance which could provide some selling pressure in the short run. The recent bullish upturn looks quite overstretched from a technical standpoint (RSI is near overbought levels). A retest of the 11.90-11.95 range could be on the table before a renewed push higher.
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