The British pound traded mostly lower against the Norwegian krone during the Asian session, giving back yesterday’s gains on a better-than-expected activity in the services sector.
The UK final services PMI came in at 50.0 for December, beating forecasts of 49.1 and higher than last month’s reading of 49.3. Improving order books, a strong rise in new work, and a rebound in business optimism to the highest level in 15 months signaled stabilization in the service sector in the latest survey period.
While most UK market reports are still weak, future market expectations have risen after PM Johnson secured an overwhelming majority in the Parliament.
Boris Johnson is expected to host the President of the EC, Ursula von der Leyen in London on Wednesday, which will likely mark the beginning of trade negotiations between the UK and the EU.
While any progress in the talks will likely boost the British pound during the week, the risk of a “no deal” Brexit could still weigh on the currency. There are only 11 months to reach a trade deal that took 7 years of negotiations between Canada and the EU.
Brent crude started to give back gains after reaching a high of $71.60 on rising tensions in the Middle East. Falling energy prices could be negative for the krone which traded at 11.57 against the British pound, as of 7:00 a.m. London time.
The GBP/NOK pair has been trading in a ranging market since the New Year eve, with a strong resistance forming around the 11.65 level. That level aligns with the November 10 low and has already provided selling pressure for the pair on January 02.
To the downside, the lower 11.51s could host a number of buying orders and act as a support for the pair.
