The Pound Sterling to Swedish Krona (GBP) exchange rate shed over 0.4% on Monday amid a quiet European trading session.
The GBP/SEK pairing was little-changed following the publication of the Lloyds Employment Confidence index.
The low volatility gauge showed improvement in July, rising from 1 in June to 6.
The Euro to Swedish Krona (EUR/SEK) exchange rate was trending in a slightly lower position ahead of the release of ZEW economic sentiment surveys for Germany and the Eurozone. The data is expected to show a decline in confidence and if that proves to be the case the Euro to Swedish Krona exchange rate could falter.
The Pound Sterling to Swedish Krona (GBP/SEK) exchange rate hit a low of 11.4931.
Pound Sterling to Swedish Krona (GBP/SEK) Forecast
There are two major economic reports for Sweden to be aware of this week,; the nation’s inflation figures and unemployment rate data.
Back in July the Swedish central bank, Riksbank, asserted that low inflation could justify interest rates being cut further in the near future.
Lacklustre export demand among Sweden’s main trading partners (the Eurozone in particular) has taken a toll on Sweden’s economic outlook in recent months, and the nation’s strong exchange rate has also had an impact.
Riskbank Governor Stefan Ingves, although against the last 50 basis point cut, has stressed that lower rates will be introduced if persistently low inflation makes it necessary.
At the time analyst Olle Holmgren asserted; ‘There were comments from Ingves where he suggests that it is likely that Sweden will rains later than the US and the UK, and they suggest that the interest rate could be lowered again if inflation surprises on the downside. Especially Ingves was perhaps a bit more dovish than expected.’
Consequently, if this week’s Swedish inflation report shows a slowing in price gains, rate cut speculation could be sparked and the Krona could slide against the Pound.
Economists have forecast that inflation rose by 0.4% on the year in July, double the 0.2% increase recorded in June.
Of course, Sweden’s Unemployment Rate report could spark further movement in the Pound to Swedish Krona (GBP/SEK) exchange rate. It is expected that the jobless rate slid from 9.2% to 7.3%.
The UK’s own employment data is liable to have just as much influence. Unless the UK’s average wage growth is shown to have increased the Pound could trend lower after the data is published.
The Pound Sterling to Swedish Krona (GBP/SEK) exchange rate is currently trending in the region of 11.5116.
UPDATED 10:00 GMT 12 August, 2014
GBP/SEK Trending Higher after Inflation Data
The Pound Sterling to Swedish Krona held the previous days gains following the publication of Sweden’s inflation data.
Consumer prices were shown to have fallen in July on a month-on-month basis – upping the odds of the Swedish central bank cutting interest rates in the near future.
A monthly decrease of -0.4 had been anticipated so the actual -0.3% decline wasn’t as bad as feared. However, the result still indicates that low inflation is going to remain a problem for Sweden.
The Pound Sterling to Swedish Krona (GBP/SEK) exchange rate is currently trending in the region of 11.5497
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