The British pound remained mostly unchanged against the Norwegian krone during the Asian session but retreated from yesterday’s intraday highs after a tough meeting between Boris Johnson and Ursula von der Leyen in London yesterday.
At their first face-to-face meeting since Johnson’s election win, the prime minister said he wants a free trade deal similar to that one between Canada and the EU and that the UK won’t extend the transition period beyond the end of 2020.
He also said that a future trade deal between the UK and EU shouldn’t be subject to the jurisdiction of the European Court of Justice.
Von der Leyen, President of the European Commission since December 2019, told it would be “impossible” to get a Canada-style trade deal in the next 11 months. To recall, it took seven years for Canada and the EU to broker a trade partnership.
The meeting reasserted the differing views of the UK and EU regarding the future partnership, increasing the risk of a hard Brexit if no deal gets done by the end of the year.
Meanwhile, the Halifax report showed that house prices in the UK posted their strongest monthly gain in over a year with a 1.7% rise in December.
Later today, the Bank of England Governor Mark Carney is due to deliver a speech at The Future of Inflation Targeting Conference in London. Any remarks on future monetary policy could add to the sterling’s volatility during the day.
From Norway, we’ll get the inflation rates for December tomorrow which are expected to show a slight fall to 1.5% from the November reading of 1.6%, year-over-year. The Iranian-fueled oil spike failed to provide substantial support for the krone.
The resistance level at 11.65 provided some selling pressure for the GBP/NOK pair which closed at 11.61 after reaching an intraday high of 11.66 yesterday. To the downside, the January lows in the lower 11.50s remain a mid-term support zone. As of 7:00 a.m. London time, the pair traded at 11.62.