GBP/SEK Exchange Rate Jumps as Sterling Continues to Gain on UK Vaccine Hopes
Investors are piling into the Pound Sterling to Swedish Krona (GBP/SEK) exchange rate today. The Pound (GBP) is capitalising on Swedish Krona (SEK) weakness thanks to UK coronavirus vaccine hopes and poor Swedish data.
The Swedish Krona has been tumbling in recent weeks. Last week saw GBP/SEK climb from the interbank level of 11.35 and close the week much higher, in the region of 11.45.
Since markets opened this morning, GBP/SEK has been climbing even higher. At the time of writing, GBP/SEK is trending near an interbank high of 11.53, the best level for the pair since October 2020.
Still, the Pound’s appeal is limited, and the bullishness the British currency is seeing today could fade soon if there are no more upside surprises in Britain’s outlook.
Pound (GBP) Exchange Rates Remain Appealing as UK Continues Vaccinations
Britain’s coronavirus vaccinations schemes continue to stay ahead of those in other major economies. With Britain ramping its vaccinations up week by week, this is keeping the Pound appealing.
Not only has the UK-EU row over vaccination exports seemingly subsided for now, but Britain continues to secure more vaccination orders for later in the year as well.
With most care homes in the UK having been offered vaccines by now, there is rising hope that vaccines will go on to be offered to more and more workers.
On top of domestic vaccine hopes, today’s UK manufacturing PMI data came in better than forecast. This only further supported the Pound.
Swedish Krona (SEK) Exchange Rates Tumble as Swedish Data Misses the Mark
After months of strong data boosting the Swedish Krona higher, a combination of factors is causing the Krona to plunge in recent weeks.
Riksbank’s shift in tone on foreign reserves kickstarted a big Swedish Krona selloff in January. Then, today’s Swedish ecostats disappointed investors, leaving markets even more hesitant to buy the Swedish currency.
Swedbank’s Swedish manufacturing PMI printed at 62.4 rather than the expected 65.
What’s more, Sweden’s key Q4 growth rate report showed weaker than expected growth of 0.5%, with the yearly growth rate worsening to –2.6% rather than improving as hoped.
Pound to Swedish Krona (GBP/SEK) Exchange Rate May Run Out of Steam
Investors continue to buy the Pound today, but unless there are some upside surprises in the Pound outlook, investors may run out of reasons to keep buying the British currency soon.
Vaccination hopes have been boosting the Pound, but Sterling’s upside potential is running out of steam as optimism around vaccines is being priced into the Pound outlook.
What’s more, there are still uncertainties over how long Britain’s current lockdowns will last.
No notable UK or Swedish data will be published tomorrow, leaving GBP/SEK to be driven by coronavirus developments.
However, Wednesday’s UK and Swedish services PMI data will be closely watched by investors.
If UK services data from January beats forecasts, hopes of UK economic resilience will rise and the Pound could see a more driven rise higher. On the other hand, weaker UK data could knock some of the Pound’s recent optimism and GBP/SEK could fall.
Overall, aside from UK and Sweden coronavirus developments, Pound to Swedish Krona (GBP/SEK) exchange rate investors are looking ahead to Wednesday’s services results.