Pound to Swedish Krona Exchange Rate Keeps Falling as Risk-Rally Persists
Despite fresh coronavirus fears continuing to crop up, risk-sentiment remains high and the Pound Sterling to Swedish Krona (GBP/SEK) exchange rate continues to tumble. As Sterling (GBP) continues to be undermined by Brexit uncertainties the currency trends near its worst levels.
After sharp losses from the level of 11.61 to 11.34 last week, GBP/SEK remains on a downside trend this week.
Attempts to hold its ground were short-lived. GBP/SEK touched on a new low of 11.23 yesterday. This was the worst level for the pair in almost two and a half years, since February 2018.
GBP/SEK has struggled to sustain any recovery from these lows too. Following a rebound attempt yesterday, GBP/SEK once again trends near those two-year lows in the region of 11.25 at the time of writing.
Pound investors are hoping for stronger support from Brexit developments. However, if UK-EU Brexit negotiations continue to show no signs of progress, investors will have little reason to shift their currently gloomy Pound outlooks.
Pound (GBP) Exchange Rates Downbeat as Hard-Brexit Fears Return
This week’s Pound recovery attempts have been short-lived, as the British currency’s outlook remains too clouded in coronavirus and Brexit fears.
Investors remain anxious about Britain’s resilience to the coronavirus pandemic amid concerns over the UK government’s handling of the crisis. On top of this though, Brexit jitters have also returned to the forefront of Pound weakness.
With July perceived as a major month in UK-EU Brexit negotiations, the lack of developments and speculations of collapsing talks are weighing on Sterling once again.
Reports have emerged that the UK could walk away from negotiations, and analysts are increasingly doubtful that a soft Brexit at the end of 2020 will be possible.
This is keeping Sterling weak today, despite some hopeful signs in UK data. The Confederation of British Industry’s (CBI) latest data showed that manufacturers are becoming more upbeat.
However, according to CBI Chief Economist Rain Newton-Smith, the pandemic is likely to keep interfering with investment:
‘There are tentative signs of gradual recovery on the horizon, with firms expecting output and orders to begin to pick up in the next three months. But demand still remains deeply depressed.’
Swedish Krona (SEK) Exchange Rates Remain Resilient on Risk-Sentiment
Investors continue to buy currencies more correlated to risk-sentiment this week, including the Swedish Krona (SEK).
This is despite some fresh coronavirus fears also rising this week.
Coronavirus cases continue to surge in the US and some parts of Australia. It has led to fresh concerns that a ‘second wave’ could damage the chances of a global economic rebound.
The Swedish Krona continues to benefit from hopes of an economic rebound despite these factors.
An oil price rally this week has also supported market risk-sentiment and bolstered Krona support.
Currency movement was little impacted by today’s Swedish unemployment rate report from June. Swedish unemployment worsened more than expected to 9.8%. Despite this, the Krona continues to trend relatively closely to its best levels.
Pound to Swedish Krona (GBP/SEK) Exchange Rate Awaits Brexit and PMI News
The Pound’s weakness remains one of the primary causes of GBP/SEK losses this week. As a result, the pair could continue to remain near its worst levels so long as markets have little reason to buy the Pound.
Sterling may find fresh support though, depending on potential news before the end of the week.
Tomorrow’s European session will see the publication of Britain’s June retail sales. Markit will also publish July PMI projections for the nation.
These stats will give markets fresh indication of how Britain is weathering the coronavirus pandemic.
Of course, Sterling traders will also be keeping a close eye on Brexit developments. With the latest round of UK-EU Brexit talks expected to end today, any surprises could cause Pound movement.
As for the Swedish Krona, the Pound to Swedish Krona exchange rate could remain under pressure so long as risk-sentiment keeps the Krona buoyed.