GBP/SEK Exchange Rate Edges Higher, Sweden Confident in Covid-19 Strategy
The Pound to Swedish Krona (GBP/SEK) exchange rate edged higher today, with the pairing currently trading around 11.504kr.
The Swedish Krona (SEK) fell today following the release of the latest Swedish producer price index for July, which fell below forecasts from -0.2% to -0.7%. As a result, SEK investors have become more concerned for Sweden’s economic recovery in the months ahead.
Meanwhile, the year-on-year Swedish PPI for July fell from -3.8% to 4.9%.
Swedish Prime Minister Stefan Löfven has also maintained that the nation’s controversial and unconventional coronavirus response has been effective. He said:
‘Now there are quite a few people who think we were right. The strategy that we adopted, I believe is right — to protect individuals, limit the spread of the infection.’
Sweden’s Chief Epidemiologist, Anders Tegnell, also said he believes that Sweden will not have a ‘classic second wave’. As a result, this has provided a degree of optimism in the Swedish currency as hopes are beginning to grow for the nation’s economic recovery.
Pound (GBP) Edges Higher Despite Growing Concerns Over a No-Deal Brexit
The Pound (GBP) edged higher today despite growing concerns of Brexit. This follows comments from the European Union’s (EU) Chief Negotiator, Michel Barnier, who criticised Downing Street’s approach to trade negotiations.
Mr Barnier also told European states to be ‘cold-blooded’ with the UK, leaving many GBP investors concerned of a possible no-deal in December. He also added:
‘Those who were hoping for negotiations to move swiftly forward this week will have been disappointed.’
In UK economic data, today saw the release of the CBI distributive trades survey for August, which fell below forecasts from 4% to -6%.
Alpesh Paleja, CBI Lead Economist, commented on the data:
‘Firms will be wary of deteriorating household incomes and the risk of further local lockdowns potentially hitting them in the pocket for a second time.’
GBP/SEK Forecast: Could Growing Hopes for Sweden’s Economic Recovery Boost the Swedish Krona This Week?
Pound (GBP) investors will be looking ahead to tomorrow’s speech from Andrew Haldane, the Bank of England’s Chief Economist. Any dovishness about Britain’s economic performance, however, could drag down Sterling.
Swedish Krona (SEK) traders, meanwhile, will be looking ahead to Thursday’s Swedish data releases. Any improvement in Sweden’s consumer confidence gauge for August would prove SEK-positive.
Thursday will also see the release of July’s Swedish retail sales report, which is expected to rise by 1% month-on-month. As a result, we could see the GBP/SEK exchange rate begin to fall on growing hopes for Sweden’s economic recovery.