The Pound rallied against a host of other majors on Wednesday, with particularly impressive gains made against the Norwegian Krone (GBP/NOK), up by around +0.50%. The GBP/NOK exchange rate has so far hit highs of 11.1894.
The pound was able to clamber higher against the US Dollar, Euro, and other major currencies after UK wage data impressed investors. Tuesday had seen inflation rise yet again, further increasing the squeeze on British households following a Brexit-inspired fall in Sterling. However, wages had been lagging behind at 2.2% on the year, until Wednesday’s data showed a surprising upswing from a positively revised 2.3% to 2.5%.
The UK’s unemployment levels remained at 42-year lows of 4.3%, despite expectations for a small fall to 4.2%. While wage data was positive, the British Employment Change figure showed a decline of -56K, the biggest fall since May 2015.
Office for National Statistics (ONS) statistician Matt Hughes commented:
‘Employment stayed close to its record high and while up on a year ago, declined compared with the previous three months. Unemployment also fell, but there was a rise in the number of people who were neither working nor looking for a job. Meanwhile the number of vacancies continues to grow, reaching a new record high. There has been a slight pick-up in pay growth in cash terms, which means that although earnings are still growing less than inflation, the gap has narrowed.’
Meanwhile, the battered Norwegian Krone could push Norges Bank to exit its monetary stimulus measures that have been in place for the past two years. It’s unlikely that the central bank will adjust its interest rate from the record low 0.5% on Thursday in the last Norwegian interest rate decision of the year, but the Oslo based policymakers are expected to indicate that the central bank is heading towards a rate rise.
Norway’s economy has been under pressure as the world’s largest petroleum producer on account of oil. A decline in oil prices has translated into job losses and a more lethargic economic growth. It’s been suggested that the 2014-2015 tumble in oil prices had a bigger impact on Norway than the Global Financial Crisis (GFC) in 2008. Job losses have totalled around 50,000 in the oil sector alone, a notable drop in the country which houses around 5.3 million people.
Recently, Norges Bank has suggested that there was a slim possibility of an interest rate increase by the end of 2018.
The Pound to Norwegian Krone (GBP/NOK) exchange rate is currently trending in the region of 11.1901.