GBP/SEK Exchange Rate Falls as Swedish Markets Close for Ascension Day
The Pound to Swedish Krona (GBP/SEK) exchange rate plummeted by over -1% today, with the pairing currently trading around 11.74kr.
The Swedish Krona (SEK) has benefited from growing optimism over Europe’s reopening of its economy today, with the Swedish economy set to benefit from exports and increased foreign trade.
However, Swedish markets are closed today for the Ascension Day.
However, doubts are growing over Sweden’s ability to handle the economic crisis caused by the coronavirus pandemic.
Hans Tjernström Carraro, from the Swedish Trade Federation, commented:
‘Stores have continued to be open, which of course has been important for Swedish trade. On the other hand, we see that quarantine, reduced travel, cancelled events and reduced movement in society have had a very strong impact on trade. The big cities have been hit hardest. E-commerce has increased but not fully compensated for the total loss of sales. Consumers also increase their savings when economic times are uncertain and unemployment rises.’
Nevertheless, with Sweden’s export-reliant economy likely to benefit from increasing world trade in the coming weeks, we could see the Swedish Krona continue to rise.
Pound (GBP) Falls as BoE Says ‘We’re Not Ruling Out’ Negative Interest Rates
The Pound (GBP) suffered after Andrew Bailey, the Governor for the Bank of England (BoE), failed to rule out imposing negative interest rates on the British economy today.
Mr. Bailey said that they were ‘looking carefully’ in how other central banks have handled negative interest rates, saying that it has been ‘quite a nuanced policy tool’. However he commented: ‘We’re not ruling it in, and we’re not ruling it out.’
As a result, this has left many Sterling traders concerned about the health of the British economy in the coming months.
Today also saw the release of the UK inflation report for April. The figure fell to 0.8%, considerably below the Bank’s target of 2.0%.
Howard Archer, the chief economic advisor at the EY Item Club, was pessimistic, commenting:
‘Inflation looks certain to fall back markedly further and we believe it could get as low as 0.3 per cent over the summer.’
‘Current substantially contracting UK economic activity amid still highly restrictive lockdown measures is exerting downward pressure on prices.’
GBP/SEK Forecast: Could the Swedish Krona Rise on Rising Global Trade?
Pound (GBP) traders will be looking ahead to tomorrow’s publication of the preliminary UK Services PMI for May. However, with the UK’s largest sector expected to remain in the doldrums, we could see Sterling continue to suffer.
Tomorrow will see the release of the flash UK Manufacturing PMI.
Meanwhile, Swedish Krona (SEK) investors will be keeping a close eye on global developments. If foreign trade opportunities increase, then we could see SEK rise on hopes of Sweden’s economic recovery.