The Pound Sterling to Swedish Krona (GBP/SEK) exchange rate ticked higher by around 0.16% on Tuesday afternoon.
Although British economic data printed below estimate on Tuesday, the Pound appreciated versus the majority of its most traded currency rivals; albeit fractionally. The advance can be linked to improved growth forecasts in Europe as European Central Bank (ECB) quantitative easing offsets concern regarding Greece’s slashed forecasts.
The Swedish Krona, meanwhile, climbed versus the majority of its most traded peers after domestic data produced mostly positive results. Krona gains have been somewhat laboured, however, after March’s industrial output was weaker-than-expected on the month.
The Pound Sterling to Swedish Krona (GBP/SEK) exchange rate is currently trending in the region of 12.6694.
Pound Sterling (GBP) Exchange Rate Edges Higher despite Election Volatility
In terms of short-term volatility on the Pound, the past week has seen the forthcoming general election surpass the Scottish referendum. With the general election just around the corner, one-week volatility on the Pound to US Dollar climbed to as high as 18.6%, the most since May 2010. September’s Scottish Referendum saw the same measure of anticipated price swings peak at 17.5%.
Despite growing political uncertainty weighing on investor confidence, the Pound strengthened versus many of its major competitors. The advance can be linked to a report from the European Commission which showed improved forecasts for Eurozone economic recovery. Greece’s forecasts were slashed considerably, but analysts speculate that the boost from quantitative easing will outweigh the fallout from Greek woes. Given that Europe is Britain’s biggest trading partner, improved economic recovery in the Eurozone is beneficial for the UK.
Marco Buti, the head of the commission’s economics department, said; ‘The expanded asset-purchase program adopted by the ECB has lowered interest rates while stabilizing inflation expectations, thus reducing the real interest rate.’
British economic data printed relatively disappointingly on Tuesday but the results had minimal impact on Sterling. The UK Construction PMI was forecast to drop from 57.8 to 57.4 in April, but the actual result declined to 54.2.
The Pound Sterling to Swedish Krona (GBP/SEK) exchange rate dropped to a low of 12.6417 today.
Swedish Krona (SEK) Exchange Rate Ticks Higher despite Industrial Production missing Estimates
After domestic data produced generally positive results, the Krona advanced versus many of its most traded currency competitors. On the year, March’s Industrial Production rose by 0.3%; bettering the previous figure of -3.9% but failing to meet with the median market forecast of 0.51%. On the month, March’s Industrial Production advanced by 0.8% which was below the positively revised previous figure of 1.2% and the market consensus of 0.11%. However, Yearly New Orders increased by 1.4% in March; eclipsing both the previous figure and the market estimate.
The Krona advance was also hampered by an increasing Baltic military presence as Russian combat jets and submarines entered Swedish territory. The greater military presence is said to be nearing cold war levels amid concerns about Russian assertiveness in the aftermath of the Ukraine crisis and reversing years of defence cuts. ‘We realise we are back more or less to the scenario as it appeared in the 1980s and early 1990s and have to be able to handle that kind of threat,’ said Rear Admiral Jan Thornqvist, chief of staff of the Swedish navy.
Pound Sterling to Swedish Krona (GBP/SEK) Exchange Rate Forecast to Trend Higher
Given the lack of domestic data to curb the trend, and with increasing Swedish military presence stymieing investor confidence, the Pound Sterling to Swedish Krona (GBP/SEK) exchange rate is likely to continue trending higher for the remainder of Tuesday’s European session. Wednesday ought to see GBP/SEK volatility with British services data due for publication.
The Pound Sterling to Swedish Krona (GBP/SEK) exchange rate climbed to a high of 12.7371 today.