Bias: bullish-to-range-bound, GBP/NOK sits above its 90-day average and in the upper half of the 3-month range.
Key drivers:
• Rate gap: BoE is expected to ease gradually in 2026 while Norges Bank keeps policy tighter with cuts penciled in later, narrowing the divergence and supporting NOK.
• Risk/commodities: Oil remains near 90-day highs with volatility; as Norway is a major oil exporter, firmer oil supports the NOK, though swings can complicate flows.
• Macro factor: UK growth is forecast to slow, a factor that could weigh on the pound if data disappoints.
Range: likely to drift within the 3-month range, with occasional tests of the upper end if risk appetite holds.
What could change it:
• Upside risk: stronger UK data or clearer BoE guidance that signals less aggressive easing could push GBP higher.
• Downside risk: a drop in oil prices or Norges Bank moving more quickly to rate cuts could soften NOK and limit gains for GBP/NOK.