Pound Sterling Swedish Krona (GBP/SEK) Exchange Rate Muted as Swedish Confidence Tumbles
The Pound Sterling Swedish Krona (GBP/SEK) exchange rate remained flat, leaving the pairing trading at around 12.4151Kr.
Markets were left disappointed on Friday after the first trial for a coronavirus drug did not show any benefits.
Meanwhile, the Krona was left under pressure after Swedish inflation slumped by -3.6% in March compared to last year.
While the country has chosen a more relaxed approach to the pandemic compared to the UK, the economy still shows signs of strain.
Confidence levels in the country tumbled to record lows this month. This sparked fears the country was on course for its worst recession since World War II.
Added to this, the slew of weak data increases the pressure on Sweden’s national bank, Riksbank to take further action.
UK Suffers Steepest Fall in Sales on Record
The Pound remained flat this morning after data showed that UK retail sales plummeted in March.
Official data showed sales plummeted by the most on record after a surge in food buying was offset by a tumble in sales of clothing and other goods.
This sent sales plummeting from -0.3% to -5.1% in March. This was the steepest fall in sales since the Office for National Statistics (ONS) began recording the data in 1996.
Commenting on this morning’s data, head of UK equities at Lazard Asset Management, Alan Custis noted:
‘The March retail sales data shows a sharp decline month on month. However, the real story will be seen in April’s figures when the lock-down will be fully felt by retailers.
‘Here we expect to see dire numbers, but it must be balanced up by very strong online sales, which we expect will be showing growth in excess of 50% year on year. There have been clear winners and losers and we think this will only become more apparent the longer the crisis continues.’
Gloomy Consumer Confidence Leaves GBP Flat
Meanwhile, the Pound was hit with further gloomy data after GfK revealed consumer confidence remained at its lowest level since 2009.
April’s confidence held at -34, after the earlier slump in late March caused by the coronavirus lockdowns. Worries the country was headed for a deep recession also weighed on GBP.
Commenting on today’s data, client strategy director at GfK, Joe Staton said:
‘It is impossible to say if this is at the bottom after weeks of adjustment to the reality of lockdown life, or if further falls are to come.’
Pound Swedish Krona Outlook: Riksbank and Retail Sales in Focus
Looking ahead to Tuesday, the Swedish Krona (SEK) could suffer losses against the Pound (GBP) following Riksbank’s interest rate decision.
The Krona will slide if Sweden’s central bank is overly dovish about the economic outlook.
Meanwhile, disappointing Swedish retail sales could also drag SEK lower. If March’s sales plummet due to the coronavirus despite Sweden not enforcing lockdown measures, the Pound Swedish Krona (GBP/SEK) exchange rate will rise.