The GBP/NOK currency pair settled above recent low of 12.5182, its weakest level since March 7th 2023, as fresh UK retail sales data provided support to the Pound ahead of the Bank of England’s monetary policy announcement next week.
March retail sales, a gauge of consumer demand, rose 0.7% month-over-month, exceeding the 0.2% market estimate.
The BoE will likely not adjust interest rates due to ongoing upside risks to inflation in the context of Middle East situation.
Meanwhile, the factors that previously underpinned the Norwegian Krone, including elevated energy prices and a distinctly hawkish Norges Bank stance, have started to lose momentum, according to BNY’s Bob Savage.
The Krone has experienced outflows as earlier hedge-related demand recedes and rate expectations reach a plateau, Savage notes.
“Even while the energy backdrop remains supportive, we believe NOK has largely completed its re-rating, particularly as Norges Bank has signaled a commitment to one further hike while pushing back against the prospect of additional tightening,” Savage points out.
The exotic Forex pair lost 0.51% for the week.
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