GBP/SEK Exchange Rate Edges Higher Following Weak Swedish Inflation Data
The Pound Swedish Krona (GBP/SEK) exchange rate rose today, leaving the pairing fluctuating around 11.779kr.
The Swedish Krona (SEK) edged lower against the Pound (GBP) after the publication of this morning’s Swedish Consumer Price index figures for June.
Annual figures fell below forecast from 2.2% to 1.8%. Monthly figures, meanwhile, eased by -0.1%.
Swedish Krona traders, however, were generally unfazed as analysts stated that these figures were more to do with soaring energy prices last year due to warmer weather.
James Smith, a Developing Economy Specialist at ING, added:
‘[T]he Riksbank has already factored all of this into its forecasts and in fact the June CPIF figure was slightly above what they had anticipated in the latest inflation report. [T]here’s nothing in these latest figures to alter the Riksbank’s guidance that rates could rise again as soon as late-2019.’
Pound Swedish Krona (GBP/SEK) Exchange Rate Increased as BoE Emphasised Ability to ‘Absorb’ Worst-Case Brexit
The Pound (GBP) stabilised following this afternoon’s financial stability report from the Bank of England (BoE).
The BoE said in its statement that the UK was ‘prepared for Brexit and trade war fall-out’, easing no-deal fears as the central bank emphasised its resilience.
‘Even if a protectionist-drive global slowdown were to spill over to the UK at the same time as a worst-case disorderly Brexit, the core UK banking system would be strong enough to absorb, rather than amplify, the resulting economic shocks and continue to serve UK households and businesses.’
The Governor of the BoE Mark Carney however commented that Europe should do more to prepare for Brexit, despite the fact that UK firms were readying for future uncertainties.
Mr Carney further highlighted the disruptions over cross-border financial links if the EU failed to intervene, which would damage businesses in both economies.
Some Pound traders, however, have remained cautious following today’s mixed central bank statement.
GBP/SEK Forecast: Brexit and Tory Leadership Race to Remain in Spotlight
Swedish Krona traders will likely remain sensitive to ongoing global trade tensions.
Any indications of US-China trade tensions rising could dampen the chances of a rate hike from Sweden’s central bank, thus weakening the SEK/GBP exchange rate.
Sterling traders, meanwhile, will be looking ahead to tomorrow’s speech by Gertjan Vlieghe, a member of the BoE’s Monetary Policy Committee.
Brexit and developments surrounding the ongoing Tory leadership race are likely to remain in focus for Pound traders.
The GBP/SEK exchange rate could, however, begin to sink if either leadership candidate shows any further favourability for a chaotic exit from the European Union.