Pound to Swedish Krona Exchange Rate Edges Up on Weaker Swedish Inflation but Remains Weak
The Swedish Krona (SEK) is slightly weaker on today’s Swedish inflation report, but the Pound Sterling to Swedish Krona (GBP/SEK) exchange rate is only just off its worst levels today. Pound (GBP) movement is steadying from days of Brexit-related losses.
Following last week’s GBP/SEK advance to the interbank level of 11.60, the pair has since shed all of last week’s gains and more.
GBP/SEK has shed considerable ground in the first half of this week alone. Yesterday, GBP/SEK touched on a low of 11.34 – the worst level for the pair in a month.
While GBP/SEK is trending slightly higher in the region of 11.38 at the time of writing, its potential for gains is limited. No-deal Brexit fears may only worsen, and analysts predict the Swedish Krona will remain appealing.
Pound (GBP) Exchange Rates See a Breather after Days of Sharp Losses
Earlier in the week, the Pound (GBP) plummeted across the board. Investors sold the British currency in reaction to the UK government’s plans to redraft its Brexit withdrawal bill.
The move was widely criticised as something that was not only threatened UK-EU Brexit negotiations, but was also illegal.
Sterling was free falling until yesterday, when the EU responded. The EU said it would not drop negotiations over the move, which helped the Pound to steady.
Analysts noted that while the EU’s comments helped, they do not solve the issue which is still dominated with uncertainty. According to Sarah Hewin, Economist at Standard Chartered:
‘It’s the comment we had from the EU not seeking to suspend Brexit negotiations over the internal market bill – that’s what is supporting the market,
The issue has been: how will the EU respond? It seems like they regard the bill as tolerable, or that they can work with it,
But it could also mean the EU just wants the UK to explain its actions first before making a decision.’
Swedish Krona (SEK) Exchange Rates Remain Strong Among Major Currencies
The Swedish Krona (SEK) has been one of the best performing major currencies this year so far.
Its strength has been due to a combination of factors, including looser monetary policy from the Federal Reserve and European Central Bank (ECB).
Sweden’s handling of the coronavirus pandemic has been more relaxed than many of its neighbouring countries. While infections were high for a while, they have slowed in recent weeks.
As Sweden’s economic activity remained resilient during the pandemic, this has also benefitted the Swedish Krona.
What’s more, analysts believe there is further strength ahead for the currency. According to Kristin Magnusson Bernard, Chief Executive Officer at API:
‘The combined action of monetary and fiscal stimulus around the world has kept risk appetite up, and the SEK tends to do well in these kind of circumstances,’
Still, the Swedish Krona was knocked a little from its best levels today, as Sweden’s latest inflation rate data came in lower than forecast.
Pound to Swedish Krona (GBP/SEK) Exchange Rate Focuses on Brexit Negotiations
A sudden return of no-deal Brexit fears has been by far the biggest cause of movement in the Pound to Swedish Krona (GBP/SEK) exchange rate this week.
The penultimate round of UK-EU Brexit negotiations are underway this week. Officials have set mid-October as a deadline for reaching some kind of deal.
If there is no progress in negotiations, no-deal Brexit fears could rise and the Pound’s (GBP) losses could deepen.
Brexit developments are likely to be the focus for GBP/SEK in the coming sessions. The Swedish Krona (SEK) is likely to remain appealing overall as well.
Tomorrow will see the publication of Britain’s July growth rate results. These may be influential for the Pound to Swedish Krona (GBP/SEK) exchange rate if there are no surprising Brexit developments in the coming months.