Pound to Swedish Krona Exchange Rate up as Swedish Krona Hit by Various Factors
The Pound (GBP) continued to see resilient performance today, making it easy for the Pound Sterling to Swedish Krona (GBP/SEK) exchange rate to hold near its best levels. The Swedish Krona (SEK) is being weighed by domestic factors this week.
Weakness in Swedish data has kept SEK under pressure. This made it easier for GBP/SEK to advance from the interbank level of 12.21 to 12.29 last week.
This week’s movement has been even more bullish so far. At the time of writing, the GBP/SEK interbank level is trending near a half-month-high of 12.43.
Sterling is being supported by Brexit hopes. Meanwhile, the Swedish Krona is being weighed by poor Swedish retail stats and Riksbank meeting minutes news.
Pound (GBP) Exchange Rates Advance amid Brexit Hopes
The Pound (GBP) has found support in Brexit hopes today. It follows support from stronger data earlier in the week.
The UK government’s Brexit plans will return to Parliament debate and vote this week. It is widely expected that it will easily pass through the House of Commons into the upper house.
The House of Lords is expected to smoothly pass the bill into law, which will confirm the government’s Brexit plans. This will prevent a no-deal Brexit from happening at the end of this month.
Due to market optimism that the bill will finally succeed and progress, perceived political uncertainty has fallen. This is keeping the Pound appealing.
Today’s UK labour productivity report also beat expectations, rebounding from -0.2% to 0.4% in the final Q3 2019 print. This further boosted Sterling support today.
Swedish Krona (SEK) Exchange Rates Pressured by Weak Data and Riksbank Minutes
GBP/SEK was more easily able to hold its ground near its best levels today, thanks to fresh weakness in the Swedish Krona (SEK).
While yesterday’s Swedish services PMI was better than expected, this morning’s retail sales results fell well short in all notable prints.
Swedish retail sales unexpectedly fell from 0.2% to a contraction of -0.4% month-on-month in November. The yearly retail figure slowed from 3.3% to just 1.3%.
On top of concerning retail sales stats, the Swedish Krona was pressured by a mixed tone in the latest Riksbank meeting minutes.
In the Riksbank’s December policy decision, the bank hiked Sweden’s interest rates to 0.0%. It marked the first time that a central bank with negative rates had stopped using them.
However, due to weakness in recent Swedish data, some policymakers expressed concern at hiking interest rates. New Riksbank Deputy Governor Anna Breman said:
‘My overall assessment is that the risks associated with raising the repo rate at present are greater than the disadvantages following from waiting a few more months,’
Pound to Swedish Krona (GBP/SEK) Exchange Rate Could Weaken if Brexit Uncertainties Worsen
The Pound (GBP) is currently benefitting from hopes that the Brexit process will smoothly proceed into the next stage. However, concerns about another year of UK-EU Brexit negotiations weigh on the Pound outlook.
UK Prime Minister Boris Johnson is expected to meet with European Commission President Ursula von der Leyen today, ahead of tomorrow’s Brexit vote in Parliament.
If the meeting between top officials ends with further indication that the government’s Brexit stance is relatively hard, the Pound outlook could worsen and GBP/SEK is more likely to shed some of this week’s gains.
The Swedish Krona (SEK), on the other hand, could continue to see pressure amid concerns about Sweden’s economic outlook.
Friday’s Swedish industrial production results could cause further weakness in SEK if it disappoints investors, but the currency could strengthen if the data beats forecasts.
As the Swedish Krona is often correlated to market risk-sentiment, further US-Iran developments could also influence the Pound to Swedish Krona (GBP/SEK) exchange rate.