GBP/SEK Exchange Rate Falls, No-Deal Brexit Fears Rise as UK-EU Talks at Critical Point
The Pound Swedish Krona (GBP/SEK) exchange rate fell by -0.6% today, with the pairing currently trading around 12.082kr as President of the European Council, Donald Tusk accused Prime Minister, Boris Johnson of playing a ‘stupid blame game’.
Sterling fell against the Swedish Krona as UK markets became increasingly jittery over the likelihood of a no-deal outcome. With Boris Johnson’s repeated insistence that the present Brexit proposal represents the ‘final’ offer, a breakdown in negotiations appears inevitable.
Michael Gove, former Secretary of State for the Environment, exacerbated market fears with today’s ‘no-deal readiness report’ in which he said:
‘It is the top priority of this government, and principal focus of my job, to get ready for Brexit on 31 October with or without a deal. We would prefer to leave with a deal, and continue to work in an energetic and determined way to achieve one, but we must be prepared for all eventualities.’
In UK economic terms, this morning saw September’s UK BRC like-for-like retail sales figure ease from -0.5 to -1.7%, the worst level since 1995.
SEK/GBP Exchange Rate Edges Higher as Swedish Industrial Production Beat Forecasts in August
The Swedish Krona (SEK) rose against the Pound after Sweden’s industrial production for August beat forecasts and rose by 2.5% year-on-year, following an upwardly revised 3.8% in the previous month.
Some of these gains were clipped by today’s year-on-year Swedish new orders manufacturing figure for August, which fell by -1.1%.
Meanwhile, the trade-reliant Swedish economy continues to benefit from renewed hopes for a US-China trade deal and a statement from President Donald Trump’s in which he said the two superpowers could ‘do something very substantial’.
Talks between the two superpowers could face complications, however, following a US decision to place 28 Chinese entities on a blacklist, effectively barring them from importing American technology.
Prakash Sakpal, an Asia Economist at ING, commented:
‘The move may fuel more tension between the two sides although investors remain hopeful for at least some headway on trade.’
The Swedish Krona could lose some of its gains if US-China trade relations deteriorate ahead of this week’s Washington talks.
GBP/SEK Outlook: Could the Swedish Krona Sink on Global Trade Uncertainties?
SEK investors will focus on global economic and political developments this week, with any escalation in either the US-China, or US-EU trade wars likely to drag on the trade-sensitive currency.
Meanwhile, Thursday will see the release of September’s Swedish inflation figures, which are expected to improve by 0.3% on the month and could offer some support to the Krona.
Brexit developments will remain in the driving seat for the GBP/SEK exchange rate, meanwhile, with any further signs of a fallout between the UK and EU likely to drag on the Pound.