Pound to Swedish Krona Exchange Rate Benefits from Brexit Speculation, Poor Swedish Data
Due to rising hopes that a no-deal Brexit can be avoided, the Pound Sterling to Swedish Krona (GBP/SEK) exchange rate has seen stronger demand in recent weeks. Thanks to poor Swedish data this week, the pair’s gains have been even stronger.
Last week saw GBP/SEK climb from 11.48kr to 11.63kr, and the pair has continued to put in solid gains this week so far. This morning, GBP/SEK briefly touched on its best levels in over two months and is trending just below that high at the time of writing.
Demand for the Pound (GBP) has been stronger this week amid market speculation that UK politicians could vote to prevent a no-deal Brexit from happening.
This has made it easier for the Pound to climb versus an unappealing Swedish Krona (SEK), which has been weaker due to poor Swedish data in recent weeks.
Pound (GBP) Exchange Rates Bolstered by Hopes No-Deal Brexit can be Avoided
Despite the broad uncertainty that remains in the Brexit process, the Pound (GBP) has seen stronger demand in recent sessions.
This has been because of an amendment gaining support among Britain’s opposition Labour Party, suggesting that the formal Brexit date could be delayed.
The amendment, proposed by Labour MP Yvette Cooper, could give Parliament more influence over Brexit and the power to demand a delay to the Brexit process if it succeeds.
Hopes that Brexit could be delayed are gaining steam and are the primary driver behind Pound demand.
There is also speculation that the UK Labour Party could encourage MPs to vote whether or not the UK should hold a second referendum, though the Labour Party leader Jeremy Corbyn is not expected to support such a vote.
Swedish Krona (SEK) Exchange Rates Down as Swedish Unemployment Disappoints
Following the weak Swedish PMI data earlier in the month, further signs that Sweden is being caught up in Europe’s economic slowdown dampened demand for the Swedish Krona (SEK) today.
Sweden’s December unemployment rate was published this morning. Analysts expected the figure to have worsened slightly, but instead the figure worsened from 5.5% to a disappointing 6.0%.
Still, the Swedish Krona’s losses versus a strong Pound were limited and GBP/SEK’s advance slowed. This was because while Sweden’s unemployment rate had risen it was also due to people joining the workforce.
The news is not expected to have an impact on Riksbank’s monetary policy outlook, according to Knut Hallberg from Swedbank:
‘The labor market ends 2018 on a strong note, but unemployment seems to have reached the bottom. No impact on the Riksbank,’
Pound to Swedish Krona (GBP/SEK) Exchange Rate Could Slide if Swedish Retail Stats Impress
No notable UK data will be published in the coming sessions, leaving Pound to Swedish Krona (GBP/SEK) exchange rate traders to react to potential Brexit developments as well as Sweden’s incoming retail and trade stats.
Friday will see the publication of Sweden’s December retail sales results, with the monthly figure expected to have slipped from 0.8% to 0.2%. Swedish PPI from December will also be published.
If the retail sales stats beat expectations, the Swedish Krona (SEK) could regain some of its losses and push GBP/SEK lower.
The Pound (GBP) could see some late-week movement if there are any surprising Brexit developments, although investors are now anticipating next week’s full-day Parliament debate on Brexit.
Parliament votes on amendments and legislation that could influence the Brexit process are expected to take place next week, so it could be a major week for the Pound.
Monday’s Swedish trade balance stats could also cause some Pound to Swedish Krona (GBP/SEK) exchange rate movement at the beginning of next week.