Today's South African Rand, Norwegian Krone, Swedish Krona and Danish Krone Exchange Rate News: Pound Sterling’s Performance Mixed before BoE Minutes
At the close of last week the Pound advanced on a number of its peers thanks to a stronger-than-expected UK jobs report. The UK was shown to have added considerably more positions than anticipated, resulting in a fresh multi-year low jobless rate. As the Bank of England has frequently made the connection between a more buoyant labour market and higher borrowing costs, the data pushed the Pound higher almost across the board.
The UK jobs data saw industry expert Martin Beck comment; ‘The story of the UK labour market has long been a ‘jobs-rich’ but ‘pay-poor’ one. The latest numbers are no exception with good news for those looking for work, but less so for those already in employment.’
However, Sterling failed to hold on to these gains in a climate of political uncertainty and this week sees the asset putting on a mixed performance against rivals like the Danish Krone, Norwegian Krone, South African Rand and Swedish Krona.
A quick foreign exchange market summary before we bring you the rest of the report:
GBP/NOK, GBP/DKK Trends Higher
With ecostats for Norway and Denmark thin on the ground today, the Pound was able to advance on its two European peers. The GBP/NOK exchange rate achieved a high of 11.7536 as the price of crude oil fluctuated in response to comments issued by Saudi Arabia’s oil minister while the GBP/DKK currency pair surged 0.4% over the course of the European session. In the week ahead there is no notable Norwegian data scheduled for publication, with the next ecostats worth mentioning being the region’s business confidence index (out on the 28th) and retail sales stats (set for publication on the 29th). Consequently, any movement in the Pound to Norwegian Krone currency pair will be the result of UK news or oil price shifts.
Data with the potential to initiate Pound Sterling to Danish Krone exchange rate movement includes Danish Consumer Confidence and retail sales numbers, both released on Wednesday. Although sentiment is expected to improve, retail sales are projected to have softened on both the month and year.
The GBP/DKK exchange rate hit a high of 10.3810
GBP/ZAR, GBP/SEK Hold Steady
As Monday’s UK Rightmove House Price data had little impact on the Pound (showing as it did an acceleration in price gains on the month but a deceleration on the year) both the GBP/ZAR and GBP/SEK exchange rates were left trending in a narrow range. The Rand, as a commodity-driven currency, derived some support from the People’s Bank of China’s decision to introduce additional stimulus but wasn’t able to rally against its UK counterpart. Sweden is scheduled to publish its latest unemployment figures tomorrow, with the unemployment rate predicted to ease from 8.4% to 8.2%. If the estimation proves accurate, the GBP/SEK pairing may soften. South African data to focus on this week includes the nation’s inflation numbers, producer price index and trade balance report.
The Pound to Rand exchange rate pairing brushed a low of 17.8970
While the UK’s retail sales data will be a driving force behind Pound movement this week, investors with an interest in the GBP/ZAR, GBP/NOK, GBP/DKK and GBP/SEK pairings will also be drawn to the Bank of England meeting minutes for guidance. A hawkish set of minutes would send Sterling trending higher, but dovish commentary from the central bank would be negative for the British currency.
In recent months the nine member Monetary Policy Committee (MPC) has voted unanimously in favour of keeping interest rates on hold, should any policymakers appear to be moving away from this stance it would be Pound supportive.
However, given the current inflationary climate and the fact that the UK General Election is just around the corner, it seems unlikely that the BoE will look to adjust borrowing costs anytime soon.