GBP/NOK Outlook:
Slightly weaker, but likely to move sideways, as the rate is currently below its recent average, with limited clear drivers influencing it.
Key drivers:
• Rate gap: The Bank of England's dovish stance, indicated by a recent steady interest rate, contrasts with Norges Bank’s cautious approach to rate cuts.
• Risk/commodities: Oil prices have recently reached lows, greatly impacting the Norwegian krone due to Norway's dependence on oil exports, which can pressure the NOK.
• One macro factor: UK GDP figures due soon may lead to volatility; however, expectations of only modest growth suggest limited support for GBP.
Range:
GBP/NOK is likely to drift within its recent range, reflecting the current lack of strong driving factors.
What could change it:
• Upside risk: A surprisingly strong UK GDP release could bolster the pound.
• Downside risk: Continued weakness in oil prices or further dovish signals from the Bank of England could pressure GBP/NOK lower.