GBP/SEK Exchange Rate Rises as Riksbank Holds Interest Rate below Zero
The Pound Swedish Krona (GBP/SEK) soared 1.2% today and is trading around 12.3271kr at the time of writing.
The Swedish Krona (SEK) plummeted against the Pound (GBP) following Sweden’s Riksbank interest rate decision, which held at -0.25%.
However, the Riksbank took a more dovish tone regarding monetary policy, saying that it would hold interest rates steady ‘for a somewhat longer period of time than was forecast in February’.
David Oxley, a Senior Europe Economist at Capital Economics, commented on this saying:
‘A dovish shift in its policy stance has taken the market by surprise. The repo rate is expected to be raised again towards the end of the year or at the beginning of next year and rate rises thereafter are expected to occur at a somewhat slower pace.’
Today’s publication of Sweden’s consumer confidence figures for April, however, exceeded expectations at 95.8, but this failed to provide any relief following the news of the Swedish national bank’s dovish outlook.
GBP/SEK Exchange Rate Rises as May Proposes Possible Fourth Brexit Vote
Sterling (GBP) has benefited against a weakened Swedish Krona following news that Theresa May is set to go ahead with a possible fourth vote on her Brexit deal next week.
This has provided some excitement for Pound traders as Brexit news has been short in supply since the Easter holiday, and any signs of progress have been welcomed.
However, with cross-party talks between Labour and the Conservatives showing increasing signs of being strained – if not breaking down completely – this has weighed on confidence that MPs will be willing to back May’s deal.
Jeremy Corbyn, the Labour leader, said:
‘There’s got to be some changes by the government… We will see how it goes, but the government does really need to move on with it.’
GBP/SEK Forecast: Sterling Could Increase on Cross-Party Brexit Consensus
Swedish Krona (SEK) traders will be looking ahead to tomorrow’s release of the retail sales figures for March, which are expected to remain unmoved.
These will be followed by the Swedish Producer Price Index figures for March.
Pound investors, meanwhile, will be looking ahead to tomorrow’s BBA mortgage approvals figures for March, and with any signs of improvement this could provide some further uplift for Sterling.
The Pound Swedish Krona (GBP/SEK) exchange rate is expected to remain sensitive to political developments this week, with Sterling possibly rising if there are any signs of an improving consensus between the Conservatives and the Labour party.