Pound Sterling Swedish Krona (GBP/SEK) Exchange Rate Edges Higher as Brexit Negotiations Continue
The Pound Sterling Swedish Krona (GBP/SEK) exchange rate rose by around 0.4% on Tuesday morning. This left the pairing trading at around 11.4269Kr.
The Pound was able to make gains this morning, as the currency approached a five-month high.
Sterling was largely driven by a weaker US Dollar but gains were capped as analysts remained cautious about GBP’s outlook and the next round of Brexit negotiations.
Markets are bracing for a new round of Pound volatility as negotiations between Britain and the European Union begin once again.
ING strategists Chris Turner, Francesco Pesole and Petr Krpata wrote:
‘Sterling’s recent good performance and resilience to grim economic data has likely relied on the Brexit story being put on the backburner by investors.
‘We see a non-negligible risk of markets starting to price back in a no-deal outcome.’
While investors remain cautious, Prime Minister Boris Johnson’s spokesman said yesterday that London still believes a deal will be reached by September.
Trade negotiations between the two sides are scheduled up until the start of October, less than two weeks before an EU summit. The bloc has noted negotiators must secure any deal by October to allow for ratification by the EU’s 27 nations.
Swedish Krona (SEK) Slumps Ahead of Unemployment Data
The Swedish Krona slumped against the Pound despite the release of upbeat industrial inventories data.
The latest data revealed industrial inventories rose by SEK 2.1 billion in the second quarter following an upwardly revised SEK 5.8 billion in Q1.
However, the Krona remained under pressure as traders look to the latest unemployment data which is due later this week. July’s unemployment rate is expected to jump to 10%.
Pound Swedish Krona Outlook: UK Inflation in Focus
Looking ahead to Wednesday, the Pound (GBP) could extend its gains against the Swedish Krona (SEK) following the latest inflation data.
If Britain’s inflation data impresses investors and shows signs that the country’s economy is recovering from the record slump in Q2, it will boost Sterling sentiment.
Added to this, traders will be watching the latest UK Retail Price Index. If July’s data improves more than expected it will offer GBP support and send the Pound Swedish Krona (GBP/SEK) exchange rate higher.