Irish Border Worries Leave GBP/SEK Exchange Rate Static
The Pound (GBP) has traded tightly against the Swedish Krona (SEK) today, although more broadly the GBP/SEK exchange rate remains near a one-month high.
Today’s limited pairing movement has been caused by recurrent Brexit fears, specifically pertaining to the ‘backstop’ Irish border plan.
Irish Prime Minister Leo Varadkar has rejected a time-limited backstop; this would turn a frictionless border between Ireland and Northern Ireland into a temporary measure only.
Any sign of disagreement over Brexit is enough to rattle Pound traders, which accounts for today’s limited movement.
Limited Swedish Krona to Pound (SEK/GBP) Trading on Slower Industrial Output
On the other side of the pairing, the Swedish Krona (SEK) has remained close to the Pound (GBP) today following disappointing industrial output news.
September’s readings have revealed a slowdown for the annual and monthly results and worse-still, August’s output figures have been revised down.
Pound to Swedish Krona Exchange Rate Forecast: Will UK GDP Data Boost GBP/SEK?
Looking ahead, the Pound to Swedish Krona (GBP/SEK) exchange rate could next be affected by Friday’s UK ecostats, covering GDP, trade, output and investment levels.
For the most part, this data is predicted to print positively and might cause a Pound to Krona exchange rate rise.
September’s trade deficit is tipped to shrink, while economists are forecasting a faster pace of GDP growth for the Q3 estimates and for September on its own.
Business investment stats for Q3 could provide further support, as they are expected to show an increase for the annual and quarterly readings.
The production figures are less certain – while construction and industrial output is tipped to rise, a yearly slowdown is anticipated for September’s manufacturing production reading.
If all of Friday’s UK data prints as forecast then the Pound could still rise against the Krona, given that positive results would be in the majority.
Swedish Krona Forecast: Will Slower Inflation and Higher Unemployment Cause SEK/GBP Losses?
Swedish Krona (SEK) traders will have to wait until next week for Swedish domestic data; if results match with forecasts then there could be SEK/GBP exchange rate losses.
First up will be Wednesday’s inflation rate figures for October, which are expected to show a slowdown from 0.5% to 0.3%.
A lower inflation rate will reduce the likelihood of a near-term Riksbank interest rate hike, although the Swedish central bank is still expected to raise rates in December 2018 or January 2019 regardless.
Further disappointment and SEK losses could come from Thursday’s October unemployment rate reading, which is tipped to rise from 6% to 6.1%.