The Pound had a productive session on Monday, climbing against a host of other currency majors, making notable gains against the Swedish Krona (GBP/SEK) and the Norwegian Krone (GBP/NOK).
Last week, the Swedish and Norwegian currencies felt a hit with the Krone hovering near nine-year lows, as falling commodity prices and weak data intensified the impact of the Euro’s (EUR) recent rally. By mid-week, the Euro was up against the Norwegian Krone (EUR/NOK) by 3.0%, and up by 2.2% versus the Swedish Krona (EUR/SEK).
The British currency enjoyed gains on the back of renewed Brexit hopes. On Monday it appeared as if Theresa May could be closer to making a breakthrough in talks after little progress thus far. If the British government manages to make progress and move talks on to trade, the Pound Sterling exchange rate could move higher across the board.
Theresa May is expected to potentially double her initial £18 billion divorce deal offer and an announcement is expected before the month closes. Meanwhile, the Pound to Euro (GBP/EUR) exchange rate is also trending higher. After hitting a one-month low last week, GBP/EUR has managed to attain some strength as investors watch political instability unfold in Germany.
German Chancellor Angela Merkel’s coalition talks collapsed overnight due to ‘irreconcilable differences over policies’ occurred. It’s thought an agreement over immigration couldn’t be met, which caused Angela Merkel’s coalition partners to walk away, creating the possibility of fresh elections.
Thursday will see the release of the second estimate of the UK’s Gross Domestic Product (GDP) growth rate. The figure is forecast to remain at 1.5% as per the previous reading, but any variation could create sterling movements.
The Pound to Norwegian Krone (GBP/NOK) exchange rate is residing at levels of 10.9759. The Pound to Swedish Krona (GBP/SEK) exchange rate hovers around 11.2238. The Pound to Euro (GBP/EUR) exchange rate is trending at 1.1282, around +0.73% higher.