The Pound to Swedish Krona (GBP/SEK) exchange rate was slightly firmer on Tuesday as the Swedish currency was weighed upon as data showed that Producer Prices in the Scandinavian nation rose slower than expected and as the Swedish government cut its growth forecasts over the weekend.
According to Statistics Sweden, producer price inflation eased for a second consecutive month and dropped to its lowest level in four months in July.
The producer price index increased by 1.4% on a year on year basis in July, a slowdown from the 2.3% increase recorded in the preceding month and was the lowest increase recorded since March when inflation was at 1%.
The export price index rose at a slower pace of 2.5%, after a 3.9% increase seen in the prior month. The import price index moved up 1.7%, after a 3.2% climb in the previous month.
On a monthly basis, producer prices remained unchanged in July, following 0.1% fall in June.
The soft PPI data added to concerns over the health of the Swedish economy after Sweden’s finance minister said on Saturday that he had cut the nation’s economic forecasts.
Anders Borg told the press that the negative impact of negative imports and slower growth overseas would force him to maintain his fiscal policy in an effort to support the nation’s economy.
The stagnation in the Eurozone and tentative growth in the US suggests that the global economy is continuing to struggle to get back into top gear.
Because of those factors, Mr. Borg cut Sweden’s Gross Domestic Product (GDP) Forecast for 2014 from his previous prediction of 2.5% to 1.9%. He added that growth next year would be around 3% compared with his earlier prediction for growth of 3.1%.
Pound Sterling to Swedish Krona Exchange Rate Forecast
Further gains for the Pound are set to be restrained due to a lack of major market moving domestic data releases.
It came under some pressure on Tuesday from a report, which showed that the number of mortgage approvals in the UK declined more than expected in July.
On Wednesday, the Swedish Krona could regain some ground if the latest Business Confidence reports come in positively.
Also due for publication is the latest Swedish Balance of Trade data, which is forecast to have showed an improvement in July, compared to the preceding month.
Swedish Krona (SEK) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,Swedish Krona,11.4450 ,
Euro,,Swedish Krona,9.1640 ,
US Dollar,,Swedish krona, 6.9376,
[/table]
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