GBP/NOK Tests One Week High ahead of Manufacturing Data 

Wednesday’s trade saw GBP/NOK within the range 11.5995-11.6860. The pair closed 0.03% higher at 11.6307 after gaining 5.83% in 2019.

GBP/NOK rebounded from recent two-month lows in light-volume trade and tested highs not seen since December 23rd. Yet, it is still a long way from its 2019 high of 12.215, registered on December 12th, the day when Prime Minister Boris Johnson achieved victory in the British election. 

”As we say goodbye to 2019, we can also turn the page on the division, rancour and uncertainty which has dominated public life and held us back for far too long,” Johnson said in a New Year’s message, cited by Reuters. 

”Now we have a new parliament, elected by the people to deliver the people’s priorities, which will finally respect the referendum and deliver Brexit. So we’ll get Brexit done before the end of this month,” he added. 

There still is the possibility of a “no-deal” Brexit at the end of 2020, which is seen as limiting GBP gains.

 The spread between 2-year Norwegian and 2-year UK bond yields, which reflects the flow of funds in a short term, widened to 0.766% (76.6 basis points) on December 31st, from 0.696% (69.6 basis points) on December 30th. 

Today market players will be paying close attention to two production data sets. At 8:00 GMT NIMA/DNB Markets will report on conditions in Norway’s manufacturing industry in December. The Manufacturing Purchasing Managers’ Index stood in the area of expansion for the fourth straight month in November, coming in at a reading of 53.7. Yet, overall activity decelerated from a month ago, as the sub-indexes of production, employment and inventories decreased. PMI readings above 50.0 indicate industry expansion and suggest potential expansion in overall economic activity as well. 

Meanwhile, activity in the United Kingdom’s manufacturing industry probably contracted for an eighth consecutive month in December, with Markit’s Purchasing Managers’ Index coming in at a final reading of 47.6, according to expectations. 

The preliminary estimate showed the PMI had decreased to a four-month low of 47.4 in December, as production shrank at the sharpest rate since July 2012, while incoming new work decreased for the eighth straight month. In case December’s final PMI improved more than anticipated, this would have a strong bullish effect on GBP. The official report is due out at 9:30 GMT. 

GBP/NOK was edging down 0.23% to 11.6035 in late Asian session on Thursday.

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