Pound Sterling Swedish Krona (GBP/SEK) Exchange Rate Slides as Traders Flock to Safe-Haven Currencies
The Pound Sterling Swedish Krona (GBP/SEK) exchange rate slumped by around -0.4% this morning. This left the pairing trading at around 11.8085Kr.
The Swedish Krona edged higher against the Pound this morning after data revealed Swedish producer prices declined in April.
This was the fourth consecutive month of decline, as annual prices declined by -3% after a -3.6% fall in March.
On a monthly basis, prices stagnated, showing no growth after declining -1.2% in the previous month.
Meanwhile, on Wednesday, Riksbank’s First Deputy Governor Cecilia Skingsley said the central bank has more work to do before it can buy corporate bonds as part of its crisis package to help soften the blow of the coronavirus pandemic.
Speaking on Wednesday, Skingsley said:
‘We have decided to continue our purchases of commercial paper, and we could also buy corporate bonds. But this isn’t a market that is very well-defined, compared with the markets for mortgage bonds, local authority bonds and government bonds.’
However, the Swedish Krona was still able to make gains today as traders flocked to safe-haven currencies as US-China relations deteriorated further.
Sterling (GBP) Falls on Trump’s Retaliation to Beijing’s Hong Kong Bill
The pairing was left flat today after edging higher at the start of the week as Boris Johnson announced the reopening of non-essential retail stores from June.
Risk appetite also received a boost as hopes for a global recovery from the coronavirus pandemic increased, boosting riskier assets.
Sterling also edged higher after the European Union is prepared to shift its stance on fisheries in post-Brexit negotiations.
This buoyed GBP as this has been a major sticking point as negotiations were left at a standstill, and this would be the first major concession from the bloc.
However, risk appetite declined after comments from US President Donald Trump increased tensions between the US and China. This sent Sterling lower against the Swedish Krona.
Trump stated Washington would reveal its response to Beijing’s planned security bill for Hong Kong by the end of the week.
Some reports have suggested the US is considering placing sanctions on Chinese officials, weighing on global market sentiment.
Pound (GBP) Falls despite British Grocery Sales Rising by Record-High
The Pound remained flat this morning after data revealed British grocery sales jumped by 14.3% in the 12 weeks to 17 May.
Market researcher, Kantar showed this was the fastest increase in sales since records began in 1994 as the county went into lockdown due to the coronavirus pandemic.
Kantar said that in the most recent four-week period, sales jumped by 17.2% as Boris Johnson’s government announced the first stage of easing lockdown restrictions.
Commenting on the data, Kantar’s Fraser McKevitt noted:
‘Shoppers and retailers are now thinking about what the impact of a less restrictive lockdown will be, and a phased re-opening of non-essential retail and the out-of-home food and drink sector will have a significant impact on grocery sales in the coming months.
‘However, with plans for reopening the hospitality sector still uncertain, we are currently projecting that extra meals, snacks and drinks consumed at home will mean take-home sales at the grocers could be up 12% over the course of 2020 as a whole.’
Pound Swedish Krona Outlook: Swedish Retail Sales in Focus
Looking ahead to Thursday, the Swedish Krona (SEK) could suffer some losses against the Pound (GBP) following the release of April’s retail sales data.
If retail sales plummet further than expected in April, it will leave the Swedish crown under pressure.
However, losses could be limited following the release of Sweden’s business and consumer confidence data.
If both business and consumer confidence improves more than expected in May, it could leave the Pound Swedish Krona (GBP/SEK) exchange rate flat.