Pound Swedish Krona (GBP/SEK) Exchange Rate Left Muted as Irish Backstop Abandoned
The Pound Swedish Krona (GBP/SEK) exchange rate was left muted today, with the pairing currently trading around 12.5150Kr.
The pairing were left flat despite Prime Minister Boris Johnson tweeting that the UK has secured a ‘great new deal that takes back control’.
The European Union’s chief negotiator, Michel Barnier confirmed that the controversial Irish backstop has been abandoned and will play no part in the new agreement.
However, the Democratic Unionist Party (DUP) are refusing to support the deal ‘as things stand’, citing issues with VAT arrangements and customs checks in the Irish Sea.
As the Northern Irish party are crucial to getting the deal through parliament, GBP investor reactions were largely underwhelming, leaving the Pound on the back foot.
Disappointing Swedish Unemployment Sparks Calls for Riksbank to Postpone Rate Hike
The Swedish Krona was left muted on Thursday as the country’s Statistics Office showed a sharp rise in unemployment during September.
The unemployment rate struck a higher-than-forecast 7.1%, prompting calls for the Riksbank to postpone a scheduled interest rate hike.
Over recent months unemployment has risen faster than anticipated, causing several Riksbank rate setters to question the reliability of Sweden’s labour market.
However, the September ecostats came with a caveat from Statistics Sweden, highlighting a change in the way stats are gathered and casting doubts on the reliability of the information.
The agency warned ‘the outcome should be interpreted with caution’, suggesting employment may have been underestimated and unemployment overestimated.
However, analysts agree that the labour market is deteriorating faster than expected and commenting on this, Bloomberg economist, Johanna Jeansson said:
‘Although the statistics office warned it may have overstated the last drop in employment and overstated the previous increase, there are other signs the labour market is slowing.
Pound Swedish Krona Outlook: Will a Fresh Wave of Brexit Pessimism Weigh on GBP?
Looking ahead to the end of the week, Sterling seems likely to slide against the Swedish Krona if a fresh wave of Brexit pessimism hits GBP markets.
If Prime Minister Boris Johnson fails to bring the DUP on-board, his deal is unlikely to pass through parliament during Friday’s scheduled Brexit debate and the Pound Swedish Krona (GBP/SEK) exchange rate is likely to slump.