Pound To Norwegian Krone Forecast – Is Now The Best Time To Buy NOK From GBP?

GBPNOK Forecast Highlights

• GBPNOK retraces to near-term support at 13.8
• Turbulent macro outlook favours NOK over GBP in the near term
• Further downside support noted at 13.60

How has the Pound performed against the Norwegian Krone recently?

The bashing of Pound Sterling this week saw it slump against the USD and the perennially weak Norwegian Krone.

On the chart, the rate slipped below the 14.00 round number level for the first time this year. Trading at 13.87 at the time of writing, GBPNOK now sits at a nice technical support – a level that has been reaffirmed as a floor several times in the recent past.

The question, though, is what happens next. Failure to confirm this level as support would send the rate tumbling towards the next step down at 13.6-13.5.  But will GBP exhibit enough strength to do so? This is hard to say.

Current macro headwinds are not likely to be lifted soon, and as long as current conditions remain the same. In 2022, when stock prices, GBP, and gilts prices are all tumbled at the same time, it led to a change of administration. The current gilt maelstrom is not as severe as that episode – yet, but clearly the market is sending a signal: The current path is unworkable and unsustainable.

For now, GBPNOK is still trading within a multi-year uptrend (Norwegian weak). A steep decline below 13.00 is needed to reverse this long-term bullish outlook. For now, the working assumption is that prices may rebound into 14.00.

Is it a good time to buy the Norwegian Krone with Pounds?

Based on the above analysis, it is a good time to buy the Norwegian Krone now?

The answer is yes if you need the currency in the near term. Wait for the rate to rebound slightly (13.9) to exchange some GBP for NOK. You can also secure these Norwegian Krone with a currency forward.

Or you can also wait for GBP to reassert its long-term strength against the Norwegian Krone, provided you do not need the currency soon. Buying on the spot when you need the Krone always carry some risks.

Will the pound get stronger against the Norwegian Krone in 2025?

Despite having one of the world’s highest GDP per capita, Norway’s currency, the Krone, is far less bullish.

Measured against the US dollar, the rate has been falling into double digits (and new four-year lows). Versus the Euro, the Krone is hovering near the lower end of the value near 12.00.

Why is the Krone so weak? There are many theories around NOK’s persistent downtrend, from academic to reddit-based. One popular reason behind Krone’s weakness in most discussions is the bear trend in oil prices.

The Scandinavian country exports plenty of energy. As energy prices decline, export earnings decline. This weakens the Krone. In other words, the Krone behaves like some of those ‘petro currencies’.

Another reason is Norway’s weak economic outlook. But this reason is, by logic, fairly flimsy since many countries are too exhibiting weak growth. During UK’s fiscal crisis in 2022, GBPNOK barely moved. So there must be something else.

One possibility is the central bank’s selling of the local currencies to buy foreign assets. Bear in mind that the Norwegian  government controls one of the largest sovereign wealth funds in the world (Norges Bank Investment Management), currently worth  US$1.66 trillion. 

Whatever the reason, the Norwegian Krone is weak because there are more sellers than buyers. As simple as that. And because of that, prices decline.

With a bear trend now stretching into the third year running, I would be wary to chase it. Financial trends zig-zag, rather than moving in a straight line. I watch for potential inflection points in the Krone in 2025.

What is the GBPNOK forecast in weeks, months, years?

The basic premise of the market consensus is that GBPNOK will continue to drift upwards.

This is despite the current downward pressure on Sterling. For example, the projection chart below, taken from Exchangerateforecast.org.uk, shows plenty of forecasts above 14.00 (see below).

But we all know how volatile exchange rates are. As long as macro conditions are benign these predictions may be true. Once a few macro indicators flash out-of-consensus data, the rate may fluctuate dynamically.

Source: Exchangerates.org.uk (Jan 2025)