GBP/SEK Exchange Rate Eases, US-China Trade Uncertainty Haunts Swedish Markets
The Pound Swedish Krona (GBP/SEK) exchange rate eased this morning, with the pairing currently trading around 12.462kr despite Sweden’s industrial production figure for October falling from -0.8% to -1.3%.
With Sweden’s economy being heavily export-oriented, today’s report has dampened market confidence in SEK with Sweden’s manufacturing sector continues to show signs of deterioration.
This also follows on Monday’s release of the Swedish manufacturing PMI on Monday, which fell deeper into contraction territory from 46 to 45.4.
Swedish Krona (SEK) traders are also becoming increasingly jittery over US-China trade uncertainty, with flare-ups between the world’s two largest economies likely to further weaken Sweden’s export-reliant economy.
Lu Xiang, a US affairs specialist at the Chinese Academy of Social Sciences, commented:
‘The reasons why Beijing is this calm is because Beijing doesn’t want this trade war and won’t escalate it, being calm is the only choice for China. I am sure the trade war will further spill into other areas if the US imposes the new round of tariffs in mid-December.’
GBP/SEK Exchange Rate Sinks, UK Markets Brace for Tory-Labour Leader Head-To-Head
The Pound (GBP) fell against the Swedish Krona (SEK) as British markets brace for the head-to-head debate between Prime Minister Boris Johnson and Labour leader Jeremy Corbyn this evening.
UK markets are feeling increasingly jittery, however, with concerns now rising whether Boris Johnson’s performance could jeopardise the Conservative’s lead in the polls ahead of next week’s general election.
With markets generally preferring a Tory majority next week, due to the party promising to resolve Brexit uncertainty by the end of January, any signs of Labour narrowing the gap with the Tories could lead to a hung parliament.
In UK economic news, today saw the release of November’s UK Halifax house prices figure, which beat forecasts and rose to a seventh-month high at 2.1%.
Russell Galley, Managing Director at Halifax, commented:
‘While a degree of uncertainty remains evident, it’s also clear that buyers and sellers are responding to factors such as improved mortgage affordability and the limited supply of available properties.’
This report failed to boost the GBP/SEK exchange rate, however, as UK political uncertainty continues to rise ahead of the 12th December poll.
GBP/SEK Outlook: British Political Developments to Remain in Spotlight
Sterling investors will be looking ahead to Monday’s publication of October’s UK manufacturing production figure, with any signs of improvement likely buoying confidence in the British economy.
Monday will also see the publication of the UK industrial production figure for October, which is expected to sink by -1.2%.
The Swedish Krona, meanwhile, will continue to be moved by global economic developments, with any signs of a US and China coming to a compromise on a ‘phase one’ trade deal likely to buoy the SEK/GBP exchange rate.
UK political developments will continue to drive the GBP/SEK exchange rate, however, with any signs of Labour narrowing in on the Conservative’s lead weakening the Pound on heightened fears of a hung parliament next week.