Pound Sterling Swedish Krona (GBP/SEK) Exchange Rate Rises on Upswing in UK Services Optimism
The Pound Sterling Swedish Krona (GBP/SEK) exchange rate rallied, rising by around 0.5% despite disappointing services data. The pairing is currently trading at around 12.4360kr.
The Pound rose against the Krona despite data showing the UK services sector fell into contraction last month.
Weaker demand from abroad and lower business activity sent the PMI to 49.3.
This was the fastest pace of contraction in eight months, although was better than the earlier flash estimate.
Commenting on this morning’s data, Group Director at the Chartered Institute of Procurement and Supply, Duncan Brock said:
‘The sector was hemmed in with no room for improvement in November by the fastest fall in the pipeline of new work since July 2016, and the biggest drop in export orders since this index began in September 2014. As Brexit nerves continued to affect domestic client decision-making, a veil of silence also descended over European clients in particular who were reluctant to commit until there is more clarity in the UK’s future direction.
‘Despite this stagnation, a chink of light emerged amongst the services gloom as optimism for the future was the brightest since July 2019. With the advent of the New Year, firms were in a more hopeful mood that the trading landscape had to improve in 2020.’
Swedish Krona (SEK) Slides on Weak PMI Data
The Swedish Krona slumped Wednesday as data revealed the country’s services sector contracted at a faster rate in November.
The services PMI slumped to 47.9 from 49.4 in October, marking the third consecutive month of contraction.
This dampened sentiment as last month’s reading was far below the average, and followed earlier manufacturing data.
On Monday, the country’s manufacturing PMI data revealed that the sector slowed as the PMI fell to 45.4.
This was the third consecutive month manufacturing remained below 50, and the steepest rate of contraction since November 2012.
Sterling (GBP) Jumps as Tories Extend Lead in Polls
Brexit optimism buoyed the Pound on Tuesday as the latest opinion poll from Kantar revealed the Conservatives gained further support.
Boris Johnson’s Tory Party widened the gap between themselves and Jeremy Corbyn’s Labour Party by a total of 12 points.
This provided Sterling with a boost as the Conservatives remaining in power would increase the chances of the UK leaving the European Union by the end of January.
If Boris Johnson retains his position as Prime Minister, it is likely the end to over three years of Brexit uncertainty would be within grasp.
Pound Swedish Krona Outlook: Will SEK Claw Back Today’s Losses?
Looking ahead to the end of the week, the Swedish Krona (SEK) could edge higher against the Pound (GBP) following the release of October’s industrial production data.
If industrial production rises higher than expected, it could provide the Krona with a boost.
However, Friday’s gains will be limited if October’s new orders data disappoints. If new orders plummet further than forecast, it could leave the Pound Swedish Krona (GBP/SEK) exchange rate flat.