GBP/SEK Exchange Rate Falls as UK-EU Brexit Talks Continue
The Pound to Swedish Krona (GBP/GBP) exchange rate fell significantly today, with the pairing currently down by -1.6% and trading around 11.17kr.
Sterling fell today as talks between the UK and the European Union (EU) have failed to make any significant progress towards a post-Brexit trade agreement.
Despite progress on fishing rights, talks between the two sides hang largely in the balance.
The European Union’s (EU) Chief Negotiator, Michel Barnier, was gloomy about UK-EU Brexit trade talks, saying:
‘EU-UK negotiations have entered the endgame, time is running out quickly. The EU is ready to go the extra mile to agree on a fair, sustainable and balanced deal for citizens in the EU and UK. It is for the UK to chose between such a positive outcome or a no deal outcome.’
As a result, the GBP/SEK exchange rate has plummet on fears that the UK could leave the EU without a trade agreement at year-end.
Nonetheless, GBP investors are more hopeful that this week’s rollout of the Covid-19 vaccine could help the British economy recover from the coronavirus pandemic.
Swedish Krona (SEK) Rises Despite Growing Concerns Over Economic Impact of Covid-19 Vaccine Delay
The Swedish Krona (SEK) rose today following the release of Sweden’s Industrial Production Value data for October, which rose by 0.4%.
However, SEK investors are becoming increasingly more cautious about the nation’s economic performance.
Sweden’s Riksbank also warned about the economic cost of a delay in a Covid-19 vaccine.
Sweden’s Central Bank First Deputy Governor Cecilia Skingsley commented:
‘I cannot stress enough the importance of a speedy vaccination and that the regions and other relevant functions are provided with the necessary resources. In economic terms, the benefits are very great and costs are limited.’
However, Sweden’s infection rate has recently overtaken that of UK, Germany, and Spain, sparking off concerns for the nation’s economy in the months ahead.
GBP/SEK Outlook: Brexit to Remain in Focus in Critical Week
Brexit developments will continue to determine the direction of the GBP/SEK exchange rate.
Any signs that the UK could be heading for a no-deal situation with the EU could further drag down Sterling.
Conversely, however, any indications of a possible trade agreement would be Pound-positive.
Meanwhile, Swedish Krona (SEK) investors will be monitoring Sweden’s Covid-19 situation.
If the number of Covid-19 infections continue to rise, outpacing many of its European counterparts, then we could see the Swedish Krona suffer.