Bias: bullish-to-range-bound, GBP/NOK trades above its 90-day average and sits in the upper half of the three-month range, signaling sustained pressure but capped moves.
Key drivers:
- Rate gap: The BoE signals a slower path to rate cuts, while Norges Bank has kept policy tight longer, supporting the NOK.
- Risk/commodities: Oil remains firmer than its recent average with volatile swings, which tends to support energy-linked NOK.
- Macro: UK inflation is expected to ease toward the BoE target later this year, shaping policy expectations.
Range: the pair is likely to drift within the three-month band, with occasional tests of the upper end as policy paths and oil dynamics unfold.
What could change it:
- Upside risk: stronger-than-expected UK data lifting GBP versus NOK.
- Downside risk: oil prices surge, boosting NOK and pressuring GBP/NOK lower.