Mixed Remarks from EC President Leave GBP/SEK Exchange Rate Tight
The Pound (GBP) has traded in a narrow range against the Swedish Krona (SEK) today, hitting an interbank exchange rate of SEK11.78.
This is still near the best level of weekly trading for the GBP/SEK exchange rate and comes after comments made by European Commission President Jean-Claude Juncker.
Mr Juncker has discussed the ongoing Brexit process and raised hopes for imminent progress in negotiations by saying:
‘The United Kingdom will never be an ordinary third country for us. The United Kingdom will always be a very close neighbour and partner, in political, economic and security terms.’
‘The Commission’s negotiators stand ready to work day and night to reach a deal.’
Swedish Krona to Pound (SEK/GBP) Exchange Rate Steady as Election Deadlock Continues
The Swedish Krona (SEK) has held steady against Pound Sterling (GBP) today in the aftermath of an election that produced no overall majority.
The current deadlock has left Swedish voters and politicians reeling ahead of what may be months of negotiation before a workable coalition government can be formed.
Highlighting how the ongoing political turbulence is limiting demand for the Swedish currency, Danske Bank Senior Economist Vladimir Miklashevsky has said:
‘In the SEK, the political risk premium that arose ahead of the election due to expectations of a messy parliamentary situation was confirmed by the election outcome.
‘Hence, it would be premature to scale off that risk premium just yet.
‘Government formation will take time, probably weeks – a process that could weigh further on the SEK.’
Pound Swedish Krona Exchange Rate Forecast: Are GBP/SEK Gains ahead on BoE Policy Meeting?
There could be some GBP/SEK volatility in the near-future, as Thursday will bring Swedish GDP data and a Bank of England (BoE) policy meeting.
In the former case, the morning’s finalised Swedish GDP readings for Q2 2018 are predicted to show a faster pace of growth for the quarter-on-quarter reading.
The year-on-year printing could be similarly positive, if this shows an as-forecast reprint of 3.3% GDP growth.
These results could cause an early Krona to Pound (SEK/GBP) exchange rate rise, but Pound Sterling could quickly recover when BoE officials meet at noon.
If the minutes from the BoE’s meeting reveal that policymakers are considering an interest rate hike in 2019 then the Pound could rise in value.
Additional support could come if BoE officials indicate that they aren’t likely to postpone adjusting interest rates because of the ongoing Brexit process.