Pound Sterling Swedish Krona (GBP/SEK) Exchange Rate Muted Following YouGov Poll
The Pound Sterling Swedish Krona (GBP/SEK) exchange rate remained flat, leaving the pairing trading at around 12.4053Kr.
Overnight, YouGov released its seat-by-seat predictions for next month’s UK general election which provided GBP with support.
The results provided markets with an upbeat image, as the Conservatives are predicted to gain a comfortable majority of 68.
While the poll reveals a big win for the current Prime Minister, it was a grim reading for Jeremy Corbyn.
The Labour Party is expected to fall back to 211 seats from 262.
The model developed by YouGov accurately predicted the 2017 election result, and YouGov stated:
‘Most seats changing hands are the ones that Labour won in 2017 that are now set to be taken by the Conservatives. What happens in these constituencies is the most important dynamic in deciding whether Boris Johnson has a majority, and how large it ends up being.’
While the likelihood of a Conservative majority rose to 67.5% from 63% and the probability of a hung parliament decreased from 32% to 28%, uncertainty remains.
Commenting on this, in a note to clients, Societe Generale currency strategist, Kit Junckes said:
‘Apart from the fact that confidence in polls, and polling models, is pretty low, there’s also going to be a greater focus now on the lack of uncertainty about what happens after the election.’
Swedish Krona (SEK) Under Pressure as Consumers Less Confident
The Swedish Krona remained under pressure as Sweden’s business confidence rose from 94.5 to 96.9 in November.
Data also revealed that Sweden’s retail sales increased by 0.2% between September and October.
Annual sales rose by 3.3% following a downwardly revised 2.5% in September which likely weighed on the Krona.
Added to this, consumers were less optimistic in November, as Sweden’s consumer confidence fell from 92.7 to 91.9.
Yesterday: Swedish Krona (SEK) Hits Four-Month High
The Swedish crown hit a four-month high against the Euro (EUR) as uncertainty about a possible US-China trade deal lingered.
However, the Pound edged up against the Krona on Thursday, as the currency retreated from its previous high.
Trade tensions heightened as the US offered support to the anti-government protests in Hong Kong despite warning from China.
US President Donald Trump formally endorsed the protestors, signing legislation on Wednesday.
Tensions increased as China opposed the bill. Beijing’s foreign ministry stated that any attempts to interfere in Hong Kong are ‘doomed to fail’.
Commenting on this, Imre Speizer, Westpac FX analyst said:
‘It’s displeasing to the Chinese side. And we are getting close to the point when this deal needs to get signed […] the market’s reacting to it as though it might put a snag in the works.’
Pound Swedish Krona Outlook: Will Swedish GDP Buoy SEK?
Looking ahead to Friday, the Pound (GBP) could rise against the Swedish Krona (SEK) following the release of GfK’s UK consumer confidence.
If data shows confidence improved in November despite further Brexit and election uncertainty, Sterling sentiment will edge higher.
Meanwhile, the Swedish Krona could rebound following the release of Sweden’s Q3 GDP growth data.
If GDP rebounds after near-stagnation in the previous quarter, the Pound Swedish Krona (GBP/SEK) exchange rate will be left flat.