GBP/NOK Outlook:
Bearish, as the rate is below its recent average and near recent lows, under pressure from UK political uncertainty.
Key drivers:
• Rate gap: The Bank of England's dovish stance contrasts with Norges Bank's cautious approach to rate cuts, affecting investor confidence in GBP.
• Risk/commodities: Recent oil prices are at highs, positively impacting the NOK since Norway is a major oil exporter.
• One macro factor: Continued UK political uncertainties may stifle GBP movement, limiting positive momentum ahead of upcoming GDP data.
Range:
Expect GBP/NOK to test recent lows within the stable 5.4% range it has held.
What could change it:
• Upside risk: A stronger-than-expected UK GDP release could boost the GBP.
• Downside risk: Further political instability in the UK may weigh on the GBP, exacerbating its decline.