The Pound Sterling to Euro (GBP/EUR) exchange rate was trending higher in the second half of Friday’s European trading while the Pound Sterling to Norwegian Krone (GBP/NOK) and Euro to Norwegian Krone (EUR/NOK) exchange rates sank quite dramatically.
Norwegian Krone (NOK) Exchange Rate Jumps as Oil and Gas Investments Spike
The Pound Sterling to Norwegian Krone (GBP/NOK) exchange rate dropped by over 1.0% as total investments in Norwegian oil and gas industry for 2016 were 1.4% higher than previous forecasts. Next year’s total investment is now expected to reach in the region of 185 billion Norwegian Krones, while this year’s investment has also been positively revised 0.6% to 190.1 billion.
However, the Norwegian Krone’s gains may be short lived as oil prices have been slipping on Friday. Crude values were offered a little rally at the end of last week as the Organisation of Petroleum Exporting Countries (OPEC) met in Vienna and agreed to keep current output levels going rather than increasing them.
Many investors had feared OPEC would increase production, driving the global glut of crude deeper and keep oil prices lower for longer.
OPEC’s Saudi Arabia States Oil Production Increase Possible – Norwegian Krone (NOK) Exchange Rate could Sink
However, Friday has seen Saudi Arabia state that it would be willing to raise output levels to meet demand if necessary. OPEC initially increased production in order to drive a lot of the US shale oil businesses away helping crude to drop by around 50%.
National Australia Bank (NAB) stated: ‘US oil producers are working through a large backlog of drilled but uncompleted wells, which have a significantly lower cost hurdle to achieve production. Combined with sustained strength in OPEC production, the current glut situation is expected to persist for longer than previously expected, thus limiting the upward mobility in prices for the rest of 2016 and 2016.’
Greek Situation Turns Negative, Pound Sterling (GBP) Exchange Rate Climbs (GBP/EUR)
Meanwhile, the Pound Sterling to Euro (GBP/EUR) exchange rate experienced some choppy trading (with hefty gains being noted this morning) as the situation between Greece and its creditors continued.
Investors are starting to think that a deal between Greece and its creditors won’t be struck in the near future.
One official stated: ‘It would require progress in a matter of days that has not been possible in weeks. The reaction of the ECB, the IMF and several member states was extremely sceptical.’
UK Inflation, Unemployment Rate, Bank of England (BoE) Meeting Minutes Forecast to cause GBP/EUR, GBP/NOK Exchange Rate Movement
Meanwhile, next Tuesday will be highly interesting for the Pound Sterling (GBP) exchange rate with the release of the UK’s Consumer Price Index (CPI). Furthermore, Wednesday is likely to cause some more hefty Pound Sterling (GBP) exchange rate movement with the release of UK Average Weekly Earnings, Employment Change, Jobless Claims Change, Employment Change and Unemployment Rate stats.
Additionally, the Bank of England’s (BoE) meeting minutes will be out on Wednesday which could see the Pound Sterling (GBP) exchange rate rally if a policymaker divergence took place.
The Pound Sterling to Norwegian Krone (GBP/NOK) exchange rate is trending in the region of 12.0704.
The Euro to Norwegian Krone (EUR/NOK) exchange rate is trending at 8.7093.
The Pound Sterling to Euro (GBP/EUR) exchange rate is trending in the region of 1.3827.