GBP/NOK temporarily consolidated in the area just above 11.5250 on Thursday after an attempt to rebound from two-month lows in thin holiday trade. The pair has retreated nearly 2.5% over the past month alone, dragged down by renewed hard-Brexit concerns.
On the foreign exchange market, the Pound to NOK exchange rate was seen trading within a trading range of 11.5709 and 11.5188 during early Asian hours.
Brexit headlines will remain the sole factor to drive the pair during the few remaining trading days of this year until a fresh set of economic data is introduced at the start of January.
Meanwhile, NOK is likely to draw support from a positive macroeconomic outlook for the fourth quarter of 2019. After an overall flat third-quarter, Norway’s economy is on track to pick up in Q4 as monthly GDP growth in October was the highest in 16 months due to solid fixed investment growth. Additionally, October’s industrial output expanded after the state-owned Johan Sverdrup oilfield began operations. Norway’s year-on-year contraction in merchandise exports in November was the smallest in six months, indicating a potential recovery in external markets.
According to the FocusEconomics consensus forecast, Norway’s economy is expected to grow 2% in 2020, supported by stronger housing market, low unemployment and energy industry expansion.
The spread between 2-year Norwegian and 2-year UK bond yields, which reflects the flow of funds in a short term, was at 0.736% (73.6 basis points) on December 26th, unchanged compared to the preceding day.
In terms of economic calendar, the United Kingdom and Norway are not scheduled to release any relevant reports today.
GBP/NOK was up 0.10% to 11.5423 in late Asian session on Friday.