Pound Sterling Swedish Krona (GBP/SEK) Exchange Rate Slumps on Unexpected Jump in Swedish Retail Sales
Pound Sterling Swedish Krona (GBP/SEK) exchange rate slumped as Brexit fears increased and better-than-expected Swedish data. This left the pairing trading at around 12.5142Kr.
The Swedish Krona rose against the Pound after upbeat retail sales data from Sweden.
Monthly retail sales rebounded in December by a better-than-expected 0.5%, after slumping by around -0.3% in November.
This buoyed the Krona as December’s data beat market expectations of a -0.9% slump.
Annual sales unexpectedly jumped from 1.8% to 3.4% which buoyed SEK.
Added to this, Sweden’s annual inflation rose from 1.2% to 1.3%.
However, this was below forecast and remains far below the Riksbank’s 2% inflation target. This could be seen as a threat to the central bank which has ditched negative interest rates without meeting this target.
Pound (GBP) Slumps as Brexit Fears Resurface
Sterling fell on Tuesday as concerns about the future of the UK and European Union’s relationship after Brexit resurfaced.
With the UK set to leave the bloc on Friday, concerns over future ties weighed on the British currency.
Earlier, the EU’s chief Brexit negotiator warned that the bloc would ‘never, never, never’ compromise the integrity of the single market.
Michel Barnier also added that the UK’s departure would only have ‘negative consequences’ and would only ever be an exercise in ‘damage limitation’.
Commenting on the resurfacing of Brexit fears, head of G10 currency strategy at CIBO Capital Markets, Jeremy Stretch noted:
‘It’s been a case that Brexit issues have been off the agenda for a while, but there are now some signs of friction between the two sides as negotiations are gearing up, and that might be a source of consternation.’
Meanwhile, Thursday’s upcoming Bank of England (BoE) monetary policy meeting also left the Pound under pressure.
Many analysts have argued that the results of the meeting are too close to call, with the current chances of a cut sitting around 60%.
Pound Swedish Krona Outlook: Thursday’s BoE Monetary Policy Meeting in Focus
Looking ahead, the Swedish Krona (SEK) could continue to climb against the Pound (GBP) following the release further Swedish data.
If both Swedish business confidence and consumer confidence improves more than expected, the Krona will receive an upswing of support.
Meanwhile Thursday’s Bank of England (BoE) monetary policy meeting is likely to remain the main focus for investors.
If the chances of a rate cut increase higher, it will send the Pound Sterling Swedish Krona (GBP/SEK) exchange rate lower.