GBP/SEK Exchange Rate Falls as Hopes Grow for Sweden’s Economic Recovery
The Pound to Swedish Krona (GBP/SEK) exchange rate dipped this morning, with the pairing currently trading around 11.33kr.
The Swedish Krona (SEK) rose today after the Riksbank – Sweden’s central bank – held its interest rate at 0%.
The Riksbank said in its press release:
‘The Swedish economy has now begun to recover after having fallen sharply in the spring. But the way back is long and fraught with uncertainty. To provide support to economic developments and help inflation to rise towards the target, the Riksbank is continuing its asset purchases and offering liquidity in all the programmes launched so far this year.’
Meanwhile, according to Kim Sneppen, the professor of bio-complexity at the Neils Bohr Institute, Sweden’s on the road to beating the coronavirus pandemic. He attributed the nation’s success to the adoption of the controversial herd immunity programme above widespread lockdowns.
‘There is some evidence that the Swedes have built up a degree of immunity to the virus which, along with what else they are doing to stop the spread, is enough to control the disease.’
As a result, SEK investors are becoming more hopeful that Sweden’s economy could recover faster-than-expected.
Pound (GBP) Sinks as UK Government Hints at ‘Reluctant’ Shift in Coronavirus Policies
The Pound (GBP) fell this morning after Cabinet Office minister, Michael Gove, announced a ‘reluctant’ shift in coronavirus policy because of England’s soaring coronavirus infection rate.
Mr Gove said:
‘The rate of infection is increasing, the number of people going to hospital is increasing, and therefore we need to act.’
‘It is the case, as [chief scientific and medical officers] Professor Vallance and Chris Whitty pointed out yesterday, that we’re going to have a challenging next six months.’
As a result, Sterling traders are concerned that the UK economy could face some serious setbacks over the autumn-winter period.
Today also saw Bank of England (BoE) Governor Andrew Bailey warn that the worsening Covid-19 trend has reinforced downside risks for the nation’s economy.
Consequently, GBP investors are becoming increasingly worried over a significant downturn in Britain’s economy because of the coronavirus pandemic and Brexit later this year.
In UK economic news, today will see the release of September’s CBI Industrial Trends Survey. If this continues to sink, then the GBP/SEK exchange rate could fall lower.
GBP/SEK Outlook: Sterling to Sink as UK Economy Faces Uncertainty as New Lockdown Measures Come into Effect
The Swedish Krona (SEK) could continue to edge higher this week as the nation’s coronavirus situation shows signs of improvement. This could improve confidence in SEK as it is one of the few nations making steady progress against the virus.
Pound (GBP) investors will be looking ahead to tomorrow’s release of the flash Markit Services PMI for September. If the UK’s largest sector remains relatively strong, then Sterling could benefit.
GBP will fall this week as the UK enters a period in which lockdown measures are expected to intensify. As a result, the GBP/SEK exchange rate will likely continue to fall as the outlook for the British economy dims.