Pound Swedish Krona (GBP/SEK) Exchange Rate Falls as ‘Spectre of Uncertainty’ Weighs on Manufacturing
The Pound Sterling Swedish Krona (GBP/SEK) exchange rate slumped by around -0.7% this afternoon, with the pairing currently trading at around 12.4005Kr.
The Pound (GBP) was left under pressure at the end of the week as data revealing a weak economic outlook and Brexit uncertainties combined to weigh on UK manufacturing.
The UK manufacturing PMI for October was left in contraction territory for a second month in a row as new order inflows slumped, leading to increased job losses.
While last month saw a slight improvement in business confidence, optimism continues trending down, hitting the lowest levels since data was first collected in July 2012.
IHS Markit Director, Rob Dobson commented on the data:
‘The manufacturing downturn continued at the start of the final quarter as uncertainties surrounding Brexit, the economic outlook and domestic policies all took their toll. However, the underlying picture looks even darker than even these disappointing headline numbers suggest, as output and new orders fell despite short-term boosts from stock-building activity in advance of the October 31st Brexit deadline, which included a rise in exports as clients in the EU sought to mitigate supply risk.
‘With a further Brexit extension confirmed and the prospect of a December general election, it looks as if the spectre of uncertainty will cast its shadow over manufacturing for the remainder of 2019.’
Swedish Krona (SEK) Rises despite Weak Manufacturing PMI
The Swedish Krona (SEK) edged up against Sterling today despite data showing Swedbank’s manufacturing PMI dipped to a lower-than-expected 46 in October.
Added to this, September’s reading was downwardly revised to 46.1, leaving the index firmly in contraction for the second successive month.
This is far below the 29 year average of around 54.59 but is unlikely to do little to curb the Krona’s rise against GBP.
Sterling (GBP) Falls as Farage Offers PM Brexit Ultimatum
Sterling was largely steady against a handful of currencies on Friday ahead of Brexit Party leader, Nigel Farage’s party conference. News reports suggested Farage was likely to put forward fewer candidates for the December general election in an effort to avoid split votes with the Tory party.
The Pound was little changed by Farage’s announcement today that this news was only partially true. In fact the Brexit Party intends to fight the Conservatives for every seat if Boris Johnson refuses to abandon his Brexit deal.
As another example of ongoing unpredictability in the lead-up to the December general election, Farage’s comments will likely contribute to a lack of political clarity and further undermine the Pound’s ability to rally against the Swedish Krona.
Pound Swedish Krona (GBP/SEK) Outlook: Will GBP Extend its Losses?
Looking ahead to the start of next week, Sterling could slump against the Swedish Krona following the release of October’s UK construction PMI, with the Pound likely to fall if the construction sector remains in contraction territory.
Meanwhile, the Krona is likely to come under pressure on Tuesday if Swedish industrial production data for September fails to meet forecasts.
If production is weak, and manufacturing new orders slumps for the third month in a row, the Pound Swedish Krona (GBP/SEK) exchange rate is likely to be left flat.