GBP/SEK Exchange Rate Flat on Hopes of Sweden’s Containment of the Coronavirus
The Pound to Swedish Krona (GBP/SEK) exchange rate fell by -0.9% today, with the pairing currently trading around 12.319kr.
Today saw the Riksbank hold its interest rates at 0%. As a result, the Swedish Krona (SEK) stabilised as markets heaved a sigh of relief after markets had speculated on a negative interest rate decision.
The Swedish national bank said in its statement:
‘The Riksbank is prepared to continue to use the tools at its disposal to provide support to the economy and inflation.’
The Swedish Krona (SEK) continued to rise on hopes of Sweden’s coronavirus crisis coming under control, despite the nation’s light touch on lockdown measures.
However, Sweden is being judged for its light-touch approach on social distancing. Instead, the Swedish government asked rather than ordered its citizens to avoid non-essential travel or to work from home.
Sweden’s Foreign Minister Ann Linde said it was too early to tell if the country’s approach had been a success or a failure.
Mrs Linde. Commented:
‘There’s been a lot of misunderstanding. We have pretty much the same goals as every other government … And as we have always said, we are perfectly ready to go with more binding regulations if the population does not follow.’
Meanwhile, there are growing hopes that Sweden’s approach to the Covid-19 crisis could preserve its economy, despite Sweden’s official saying that ‘herd immunity’ throughout the nation being some weeks away.
In Sweden’s economic news, today saw the release of March’s retail sales figure, which fell from 0.2% to -1.7% as the coronavirus continues to weigh down Sweden’s retail sector.
Pound (GBP) Holds Steady Despite Dire UK Retail Data
The Pound (GBP) fell following the release of the CPI Distributive Trades Survey for April. The figure plummeted below consensus from -3% to -55%.
Rain Newton Smith, the Chief Economist at CBI, commented:
‘It’s no surprise that the lockdown is hitting retailers hard. Two fifths have shut up shop completely for now. And sales of groceries and other essentials also fell, suggesting households may have been dipping into stockpiles built up prior to the lockdown or tightening their belts more generally as incomes take a hit.’
However, the Pound has performed relatively well against some its peers, particularly against the Euro and US Dollar.
Sterling investors have become more optimistic as a semblance of stability returns to the Government.
Yesterday also saw Boris Johnson announce that the UK was entering its second phase of its virus battle. As a result, the Pound (GBP) rose on hopes that the Government could announce plans to ease its lockdown measures.
GBP/SEK Forecast: Could Sterling Rise on Hopes of Easing UK Lockdown Restrictions?
The Swedish Krona (SEK) will likely remains steady this week as markets continue to monitor Sweden’s progress with the coronavirus. However, should Sweden’s economy continue to open following the crisis, then we could see the SEK/GBP exchange rate edge higher.
The Pound (GBP), meanwhile, will be directed by the UK’s coronavirus developments. If the Government announces plans to ease the nationwide lockdown, then we could see the Pound rise.