Pound Swedish Krona (GBP/SEK) Exchange Rate Flat as UK Automotive Sector Hit by Brexit Uncertainty
The Pound Sterling Swedish Krona (GBP/SEK) exchange rate is currently trading at an inter-bank rate of 11.7701kr, little changed from the day’s opening levels.
Sterling was already under pressure as a result of political uncertainty, and demand for the currency wasn’t improved by the news that UK car production slumped by 15.5% in May.
This was the 12th consecutive month of declines due to falling demand both at home and abroad.
The sector has also been hit by a drop in demand for diesel vehicles, Brexit uncertainty and new regulations.
Plants shutting down in April in preparation for a possible no-deal Brexit caused output to plummet by 21% this year.
The Society of Motor Manufacturers and Traders (SMMT) have warned against a ‘seismic’ no-deal Brexit at the end of October, saying it could cripple the sector.
Commenting on the data, SMMT Chief Executive Mike Hawes said:
‘12 consecutive months of decline for UK car manufacturing is a serious concern and underlines yet again the importance of securing a Brexit deal quickly.’
Swedish Krona (SEK) Left Flat as Swedish Trade Balance Rises
Swedish Krona (SEK) exchange rates failed to benefit from the news that the Swedish trade balance rose to 8.3 billion in May.
April’s surplus was negatively revised to 1.2 billion.
Meanwhile, on Tuesday data showed that the Swedish Producer Price Index (PPI) slowed to its lowest level in 15 months.
In May, the PPI came in at 3.5% year-on-year, down from 4.9% in April.
Month-on-month, inflation remained stagnant following May’s -0.7% slump.
Sterling (GBP) Struggles as BoE Prepares for No-Deal Brexit
Meanwhile, Pound Sterling (GBP) exchange rates remain under pressure as the Conservative leadership contest continues.
The Pound slumped as front-runner Boris Johnson reaffirmed his desire to leave the European Union with or without a deal by 31 October.
In an interview with the BBC, Johnson revealed he was ‘serious’ about leaving without a deal if the EU refused to negotiate a new deal.
Meanwhile on Wednesday Governor of the Bank of England (BoE) Mark Carney emphasised that the no-deal uncertainties were damaging the UK economy.
Carney also noted that the central bank is still preparing for a no-deal Brexit, and that interest rates could be cut if that outcome occurs – a statement which was GBP negative.
Pound Swedish Krona Outlook: Will a Higher than Forecast UK GDP Buoy GBP?
Looking ahead to Friday the Swedish Krona (SEK) could slide against Sterling (GBP) following the release of Swedish retail sales data if consumer spending falls by more than forecast.
Meanwhile, the Pound could edge up following the release of Q1 UK GDP.
If GDP rises higher than forecast during the first three months of 2019, it could lift the Pound Swedish Krona (GBP/SEK) exchange rate before the weekend.