Pound Swedish Krona (GBP/SEK) Exchange Rate Flat as Euro28 Industrial Production Remains Unchanged
The Pound Sterling Swedish Krona (GBP/SEK) exchange rate edged down, and the pairing is currently trading at an inter-bank rate of 12.1224kr.
This morning, Eurostat revealed that industrial production in the EU28 remained unchanged in February.
Sweden’s production rose by 0.2% following the previous month’s fall of -0.5%, while UK production rose by 0.7%.
In the 12-months leading up to February Swedish production rose by 1.7%, while production in the UK remained unchanged.
Data showed that in the EU28 production of energy fell by 2.2% and capital goods by 0.2%, whereas non-durable consumer goods rose by 0.7%.
Swedish Krona (SEK) Flat as Inflation Falls Short of Riksbank’s Target
On Thursday the Swedish Consumer Price Index (CPI) rose by a better-than-forecast 1.9% in the 12-months leading to March.
March’s CPI rose by 0.2% after February’s rise of 0.7%.
Commenting on the data, Mats Hyden at Nordea said:
‘Riksbank should find it hard to ignore the low numbers at its April meeting. The next rate hike should still be distant.’
For the third consecutive month inflation fell short of the Riksbank’s 2% target, which has likely cast doubts on the central bank’s hopes to raise interest rates again later in the year.
However, Anna Breman at Swedbank focused on underlying inflation which was ‘marginally higher than expected’ which strengthened ‘our view that Riksbank will hike in September 2019 and then remain on hold in 2020.
Sterling (GBP) Muted as UK Extends Article 50 to Halloween
The Pound (GBP) was left unimpressed by the news of a Halloween Brexit deadline, suggesting that there is still a strong sense of pessimism about where Brexit is headed.
On Thursday morning, the UK formally accepted a six-month extension of Article 50 to 31 October, which prevented the UK from crashing out of the EU this evening.
While the Prime Minister aimed for a shorter delay, she said that the UK would aim to leave the EU as soon as possible.
During the emergency EU summit, European Council President Donald Tusk said:
‘Let me finish with a message to our British friends: This extension is as flexible as I expected, and a little bit shorter than I expected, but it’s still enough to find the best possible solution. Please do not waste this time.’
Pound Swedish Krona Outlook: Will the GBP/SEK Exchange Rate Fall on a Dovish BoE?
Looking ahead to the start of next week’s session, the Pound (GBP) could fall against the Swedish Krona (SEK) following a speech from the Bank of England’s (BoE) Jonathan Haskel.
If Haskel’s tone is dovish and refers to stockpiling providing a temporary boost to UK manufacturing and GDP, Sterling could slide.
With the new six-month Brexit deadline, it is likely that if there are any major Brexit developments, such a breakthrough during cross-party talks the Pound could rise.
If there are signs that Brexit deadlock is close to being broken, the Pound Swedish Krona (GBP/SEK) exchange rate is likely to rise.