Pound to Swedish Krona Exchange Rate Rebounds on Thursday Afternoon
Update 16:45 BST 20/08/2020:
After sliding last night, the Pound Sterling to Swedish Krona (GBP/SEK) exchange rate jumped again this afternoon.
GBP/SEK touched on an interbank high of 11.49 this afternoon. This was the best GBP/SEK level since the beginning of August.
It came amid lasting hopes for progress in Brexit talks, as well as some of this week’s better than expected UK data.
Investors are highly anticipating tomorrow’s UK retail and PMI stats. These could cause some late-week Pound to Swedish Krona exchange rate movement.
(Originally published 10:00 BST 20/08/2020)
Pound to Swedish Krona Exchange Rate Struggles to Hold Weekly Gains
After attempts to advance earlier in the week, the Pound Sterling to Swedish Krona (GBP/SEK) exchange rate slipped back again last night. The Pound (GBP) lacks drive as the latest UK data fails to really boost the outlook, while the Swedish Krona (SEK) remains generally appealing.
Last week saw GBP/SEK volatile. The pair opened the week at the interbank level of 11.42 and tumbled much lower before rebounding slightly and closing the week at 11.37.
This week has seen GBP/SEK generally trending with an upside bias. While the pair has briefly trended above last week’s levels though, GBP/SEK is only trending a little higher in the region of 11.39 at the time of writing.
The Swedish Krona continues to benefit from strong economic data. This is despite Sweden’s relatively high coronavirus death count.
Pound (GBP) Exchange Rates Fail to Capitalise on Inflation Rate Data
Yesterday saw the publication of Britain’s July Consumer Price Index (CPI) inflation rate report. The inflation came in well above expectations and led to a brief rise in demand for Sterling (GBP).
However the movement was short-lived. Analysts predicted that the Bank of England (BoE) outlook would not be influenced by this presumably temporary jump in inflation.
According to Derek Halpenny, Head of Research at MUFG:
‘The Bank of England is unlikely to draw conclusions just yet from this data … (therefore) market reaction is likely to remain muted,’
Sterling has also been weighed by a rebound in the US Dollar (USD) since last night. Federal Reserve news boosted USD higher, and much of GBP’s recent strength has come from USD losses.
Swedish Krona (SEK) Exchange Rates Steady as Swedish Unemployment Beats Forecasts
Thursday’s European session saw the publication of Sweden’s July unemployment rate. Rather than remaining at 9.8% as expected, the unemployment rate actually improved to 8.9%.
If follows strong Swedish industrial inventories results published earlier in the week. Q2 inventories came in at 2.1b and the previous figure was revised higher to 5.8b.
These stats have only kept the already strong Swedish Krona appealing. Sweden’s economy has been weathering the coronavirus pandemic fairly well.
However Sweden’s handling of the pandemic has come under criticism. The nation’s lack of lockdowns has led to relatively high death count, which some speculate could hurt the nation’s economy if it worsens.
Pound to Swedish Krona (GBP/SEK) Exchange Rate Awaits Brexit News and PMI Projections
The Pound to Swedish Krona (GBP/SEK) exchange rate is trending a little higher this week, but the pair could shed its gains if Britain’s outlook worsens.
Investors will continue to keep a close eye on UK-EU Brexit negotiations, ongoing this week. If there are no notable Brexit developments in talks, or tensions worsen, fears of a no-deal Brexit could return to markets and lead to Pound (GBP) losses.
Sterling could also weaken if Friday’s key UK data disappoints investors. UK retail sales results and PMI projections are due for publication and will be the most influential figures of the week for the UK outlook.
On the other hand, if retail and PMI data beats forecasts it could bolster hopes for Britain’s weathering of the pandemic. The Pound could see more resilient trade if data is strong.
As for the Swedish Krona (SEK), it is likely to remain fairly strong overall due to Sweden’s strong ecostats lately.
Tomorrow’s Swedish capacity utilisation data from Q2 is unlikely to be highly influential but could keep pressure on the Pound to Swedish Krona (GBP/SEK) exchange rate if it impresses.