Robust Swedish Inflation Figures Weigh on GBP/SEK Exchange Rate
The Pound to Swedish Krona (GBP/SEK) exchange rate was pushed lower this morning as markets welcomed Sweden’s latest inflation figures.
At the time of writing GBP/SEK is down by around 0.2%, with the pairing relinquishing most of the gains made on Tuesday.
Swedish Krona Bolstered as Inflation Holds Steady
The Swedish Krona was able to make some headway against the Pound at the start of the European session this morning as investors reacted to Sweden’s latest inflation figures.
According to data published by Statistics Sweden (SCB), the latest CPIF index – a measurement of consumer prices using a fixed interest rate – held at 1.7% in February.
The robust inflation figures were welcomed by SEK investors, many of whom had feared that inflation was on track to slow for a third consecutive month.
This will also come as a relief for Sweden’s Riksbank, which after ending its bond buying programme in December has seen inflation slip further away from the central bank’s target rate of 2%.
However despite today’s more robust reading, policy makers at the Riksbank are still likely to be some way off implementing the next rate hike, leaving its headline rate of -0.5% in place for some time yet.
Brexit Concerns Pressure Sterling
The Pound meanwhile is facing some pressure this morning as Brexit concerns continues to weigh on sentiment.
The latest fears have been raised by comments from European Commission President Jean-Claude Juncker on Tuesday in which he said the UK would ‘regret’ its decision to leave the EU.
Addressing the European Parliament, Juncker said:
‘I would rather have preferred Britain not to have decided to leave the European Union, but anyone who leaves the European Union has to know, frankly, what this means.’
‘If you decide to jettison, leave behind, the common agreements and rules, then you have to accept that things cannot remain as they are.’
Expanding on the negotiation guidelines published last week, Juncker went on to reject any ideas that the UK will be able to ‘cherry-pick’ parts of the single market in any future trade deal.
GBP/SEK Exchange Rate Forecast: Swedish Unemployment to Hold at Seven-month High?
Looking ahead the GBP/SEK exchange rate may rally on Thursday as Sweden publishes its latest employment figures.
Economists forecast that tomorrow’s data will show that the jobless rate will have held at a seven-month high last month, likely dragging on the Swedish Krona.
Meanwhile, a lull in domestic data for the Pound is likely to leave Brexit in focus for investors during the remainder of this week, with any further uncertainty likely to drag on Sterling sentiment.