GBP/NOK Outlook: Bearish, reflecting the rate's position below the recent average and near recent lows.
Key drivers:
- Rate gap: The Bank of England is expected to cut rates further, while Norges Bank maintains higher rates, making the krone more attractive.
- Risk/commodities: Oil prices are rising, currently at highs, which supports the NOK given Norway's status as a major oil exporter.
- One macro factor: The UK's GDP growth is projected to slow, contributing to a cautious outlook for the Pound.
Range: Movement is likely to drift within the recent stable range, testing the lower extremes.
What could change it:
- Upside risk: A surprise shift in Bank of England policy could bolster the GBP.
- Downside risk: Further declines in UK economic indicators could put more pressure on the GBP.